If you are a senior citizen or the family member of a senior citizen, you must know about these concessions – especially pertaining to finance as these can hugely impact your financial health in the sunset years and improve the quality of your life.
Let’s look at the financial benefits and concessions that senior citizens enjoy in India:
● Union Budget for the financial year 2020-2021 lays the basic exemption limit for Senior Citizens (people above 60 years but below 80 years) at Rs. 3 lakhs. For Super Senior Citizens (80 years old and above), this limit has been raised to Rs. 5 lakhs.
● Exemption from filing e-return and option to file income-tax return in paper mode.
● Deduction of up to Rs. 50,000 u/s 80TTB on the interest earned on bank savings deposit, fixed deposit and post office deposits. This can lead to a reduction of Rs. 15,000 in the tax liability for senior citizens in the higher tax bracket of 30%.
● No TDS (tax deducted at source) u/s 194A on interest income up to Rs. 50,000.
● Deduction of Rs. 1 lakh or actual expenses paid, whichever is less, u/s 80DDB for the medical expenses incurred towards the treatment of certain specified diseases like cancer or neurological diseases.
● Senior citizens enjoy higher rates of interest (0.5% more than the standard rates) on fixed deposits.
● Deduction of up to Rs. 50,000 u/s 80D for health insurance premium.
● An additional cover of Rs. 30,000 for senior citizens under Senior Citizens Health Insurance Scheme (SCHIS) by the Ministry of Health and Family Welfare.
● Amongst the small saving schemes, Senior Citizen’s Saving Scheme is dedicated to citizens above the age of 60. It has an investment cap of Rs. 15 lakhs. The rate of interest is 8.4%, which is higher than a traditional savings account and bank fixed deposits. The investors are entitled to a stable and secured quarterly income.
● ‘Varishtha Mediclaim Policy’ by National Insurance offers medical insurance benefit of up to Rs. 1 lakh in case of hospitalisation and of up to Rs. 2 lakhs in case of specified critical illnesses. This policy can be renewed until the age of 90 years.
● Senior citizens can get monthly, quarterly, half-yearly or annual pension under LIC’s Varishtha Pension Bima Yojana. This is a dedicated pension scheme for senior citizens. It has a lock-in period of 15 years and the premium paid is eligible for deduction u/s 80CCC.
One salient feature of LIC’s Varishtha Pension Bima Yojana is that the senior citizens do not require any medical check-up to invest in this scheme. This enables them to avail of a secured pension cover despite illnesses. In case of any critical illness during the tenure of investment, there is a provision of early surrender.
Apart from the above benefits, senior citizens enjoy a considerable concession in the transport fares of buses and railways all over India. Majority of the airlines also give 50% concession to senior citizens in the fare of economy class, subject to certain conditions.
India is taking concrete steps to make life better for its senior citizens. However, you can also safeguard yourself against the risks of old age by making smart investment choices
Click here to visit our Retirement Planning Calculator
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.
Disadvantages of Early Retirement - What Happens When You're Not Working?
Early retirement seems to be good, many people enjoy life without working especially with extra earnings. But they are not aware about the cons. Lets explore the disadvantages of retiring early to save your retirement life.
5 Benefits of Health Insurance that Makes it a Must Have Cover
Here are the 5 benefits of health insurance that makes it a must to cover
When Should You Withdraw Money from a Mutual Fund?
In case of a sudden change in fund strategy or an underperformance scheme for more than 3-4 years, it makes sense to withdraw money.
How To Apply For Personal Loan
Applying for a personal loan has become extremely easy these days. With the increase in applicants, banks and other financial institutions have made the process very simple.