.gif)
Coping with inflation can be difficult for senior citizens due to a lack of a steady flow of income. Thus, it is always advisable for individuals to plan their retirement budget well before retiring. A dedicated retirement budget can help them be financially independent to face the uncertainties lying ahead in the future.Given their age and income status, senior citizens often look forward to the Union Budget for getting some exemptions or relief. As per the current tax regime, the basic tax exemption limit for senior citizens is ₹3 lakhs. In comparison to the existing tax regime, the newly proposed tax regime declared in the Budget 2020 fails to offer higher tax exemption limits for the elderly and treats both senior and non-senior citizens equally.
Added benefits by Budget 2020
Budget 2020 might not have met the expectations in terms of enhanced tax exemption limits for senior citizens, yet the government offers some relief by means of added benefits in the below-mentioned ways:
- Increased allocation for 2020-2021 : The government has allocated ₹9,500 crores towards the welfare of the elderly and Divyang.
- Advanced healthcare facilities by 2024 : The government has allocated ₹69,000 crores for providing advanced healthcare facilities to the elderly at the lowest possible cost.
- Enhanced deposit insurance coverage : The government has enhanced the deposit insurance coverage for all the depositors, especially the elderly from ₹1 lakh to ₹5 lakhs.
Comparison table Exemption/ Scheme – FY 2019-20 and FY 2020-21
Budget 2020 offers two slab rate options for senior citizens:
| Option 1 | |||
| Income range | FY 2019-20 (For senior citizens) | Income range | FY 2019-20 (For super-senior citizens) |
| Up to ₹3 lacs | Nil | Up to ₹5 lacs | Nil |
| Between ₹3,00,001 and ₹5,00,000 | 5 per cent of the amount exceeding ₹3,00,000. | Between ₹5,00,001 and ₹10,00,000 | 20 per cent of the amount exceeding ₹5,00,000. |
| Between ₹5,00,001 and ₹10,00,000 | 5 per cent of the amount exceeding ₹3,00,000 plus 20 per cent of the amount exceeding ₹5,00,000. | Above ₹10,00,000 | 20 per cent of the amount exceeding ₹5,00,000 plus 30 per cent of the amount exceeding ₹10,00,000. |
| Above ₹10,00,000 | 5 per cent of the amount exceeding ₹3,00,000 plus 20 per cent of the amount exceeding ₹5,00,000 plus 30 per cent of the amount exceeding ₹10,00,000. | ||
| Option 2 | |
| Income range | FY 2020-21 (For both) |
| Up to ₹2,50,000 | Nil |
| Between ₹2,50,001 and 3,00,000 | 5 per cent of the amount exceeding ₹2,50,000 |
| Between ₹3,00,001 and 5,00,000 | 5 per cent of the amount exceeding ₹3,00,000 |
| Between ₹5,00,001 and 7,50,000 | 5 per cent of the amount exceeding ₹5,00,000 |
| Between ₹7,50,001 and 10,00,000 | 15 per cent of the amount exceeding ₹7,50,000 |
| Between ₹10,00,001 and 12,50,000 | 20 per cent of the amount exceeding ₹10,00,000 |
| Between ₹12,50,001 and 15,00,000 | 25 per cent of the amount exceeding ₹12,50,000 |
| Above ₹15,00,000 | 30 per cent of the amount exceeding ₹15,00,000 |
As per Budget 2020, senior citizens can now choose between either of the two options that result in lower income tax liability .Ready to make the most of your money? Start your tax planning journey now!
DISCLAIMER
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
.webp)
.svg)
