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How Has the Union Budget 2015-16 Been for Senior Citizens? - Outside View by PersonalFN
How Has the Union Budget 2015-16 Been for Senior Citizens?

The Union Budget 2015-16, which was announced last week, made several proposals for promoting economic growth in the country. The thrust of the Budget remained on rural empowerment, infrastructure development, encouraging industrial growth and reducing regional disparity. However, along with this, another aspect which the budget focused on was providing benefits to senior citizens of the country.

Here are the proposals made by the Union Budget 2015-16 for senior citizens:

  • Increasing the deduction limit for premium paid in respect of health insurance

    The premium paid for health insurance in case of senior citizens is eligible for deduction under Section 80D up to Rs 20,000 p.a. at present. While there were expectations that this be increased to 25,000 p.a. in case of senior citizens (and Rs 20,000 p.a. in case of non-senior citizens); the budget 2015-16 outlived these expectations. The deduction limit for senior citizens was raised to Rs 30,000 p.a. (while for non-senior citizens to Rs 25,000 p.a.).

  • Deduction for expenditure incurred for medical treatment by very senior citizens

    For very senior citizens (with age of 80 years or more) who are not covered by health insurance, the Union Budget 2015-16 proposed a deduction of Rs 30,000 p.a. towards expenditure incurred on their treatment.

  • Raising the deduction for expenditure incurred on medical treatment of specified diseases

    The amount incurred on medical treatment in relation to specified diseases of serious nature is allowed to be deducted from your Gross Total Income (GTI) up to a maximum of Rs 60,000 (for very senior citizens) currently under Section 80DDB. The Budget 2015-16 proposed to raise this deduction limit to Rs 80,000.

  • Creation of a Senior Citizen Welfare Fund

    The Union Budget 2015-16 also proposed the creation of a Senior Citizen Welfare Fund for subsidising the premiums paid by old age pensioners, BPL (Below Poverty Line) card-holders, small and marginal farmers and others. This fund would be created using the unclaimed deposits lying in the Public Provident Fund (PPF) and Employee Provident Fund (EPF) (about Rs 9,000 crores in total).

    But here PersonalFN is of the view that subsidising in such a manner is inappropriate and can lead to troubles when legitimate PPF holders and / or EPF holders or their heirs claim the unclaimed balance in their account.

  • Introduction of Pradhan Mantri Suraksha Bima Yojna

    The Union Budget 2015-16 also proposed to shortly launch the Pradhan Mantri Suraksha Bima Yojna, which will provide a cover of Rs 2,00,000 for accidental death and full disability and a cover of Rs 1,00,000 for partial disability. The premium for this will be just Rs 12 per year. This Yojna will be made available to citizens who are from 18 years to 70 years of age and having a bank account.

  • Service tax exemptions on Varishtha Bima Yojana

    As a pleasant surprise, the Union Budget 2015-16 proposed that service tax exemptions be provided on the Varishtha Bima Yojana for the benefit of senior citizens.

  • New scheme for providing physical aids and assisted living devices

    As the number of senior citizens living in the country is quite high, the Finance Minister has decided to establish a scheme that will provide physical aids and assisted living devices to senior citizens who are below the poverty line (BPL).
Hence, if you are a senior citizen, the Budget has left you with many reasons to smile. PersonalFN is of the view that senior citizens must take advantage of these announcements made by the Finance Minister. They can help you to reduce your tax outlays and thus leave you with a higher disposable income. PersonalFN believes that tax planning is an integral aspect of financial planning which must be handled prudently. Leaving the tax planning exercise for the last minute can cost you a fortune and can also harm your financial wellbeing.

PersonalFN is a Mumbai based personal finance firm offering Financial Planning and Mutual Fund Research services.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.


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1 Responses to "How Has the Union Budget 2015-16 Been for Senior Citizens?"


Mar 15, 2015

The benefits for Senior Citizens announced in the budget are paltry and cosmetic, maybe even a political gimmick or a PR exercise. The increase in limits etc barely beats inflation, so there is nothing really to smile about. If the Government is really serious about welfare of Senior Citizens, particularly very senior ones then they should not tax citizens over 80 yes old and also provide free medical treatment to them. After all 60,000/- per annum towards cost of medical treatment is peanuts today.

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