Tax Exemptions/Concessions to Senior Citzens in Union Budget 2018-2019

A circular issued by AIBRF on the above subject is reproduced below
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Ref:2018/016                                                 Date : 10.02.2018

    

    The Office Bearers/ Central Committee Members/State Body Chiefs

    A.I.B.R.F

    Dear Comrades,

                

         Re: TAX EXEMPTIONS/ CONCESSIONS TO SENIOR CITIZENS

                IN UNION BUDGET 2018-2019

Finance Minister has announced some significant concessions/ exemptions to the senior citizens  while presenting union budget for 2018-2019. The following are worth noting.

(1)     INTEREST INCOME FROM BANKS: Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.

(2)     TDS EXEMPTION: TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit schemes. (Section 194A: For quick and efficient collection of taxes, the Income tax Law has incorporated system of deduction of tax at the point of generation of income. This system is called “Tax Deducted at Source” normally known as TDS. Under this system, tax is deducted at the point of origination of income. Tax is deducted by the payer and the same is directly remitted to the Government by the payer on behalf of the payee.) In other words, starting from 01.04.2018, no TDS will be deducted from interest income by banks in case of senior citizens.

(3)     Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D.

(4)     Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lakh for all senior citizens, under section 80DDB.

(5)     Proposed to extend Pradhan Mantri Vaya Vandana Yojana up to March, 2020. Current investment limit proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.

(6)     Standard deduction of Rs 40,000 for pensioners

2. As advised you earlier, while writing on FRDI issue to FM vide our letter dated 18.12.2017 AIBRF had given suggestion to increase exemption limit on interest income from existing Rs. 10000 to Rs. 50000 to senior citizens to provide much needed relief to this group. We are indeed happy that our suggestion has been favorably considered by the FM.

3. The above concessions / exemptions will reduce tax liability of senior citizen (including bank retirees ) from Rs. 9000 to Rs. 27000 p.a. and per family Rs. 18000 to Rs. 54000 p.a. if spouse is also tax payer. We welcome these announcements and convey our thanks to the Finance Minister for this positive gesture towards senior citizens. 

   

                           With Warm Regards

                                                                    Yours Sincerely,

                                                                                                                         

                                                                        ( S.C.JAIN)

                                                                GENERAL SECRETARY

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