While the middle class benefits to some extent, the destitute elder from the lower socio-economic strata has been left completely neglected.
- Budget 2018 proposes some benefits for senior citizens, providing them tax benefits in healthcare and giving higher income from interest. However the extreme destitute poor elder neglected.
- Interest of up to ₹50,000 earned on fixed deposits by senior citizens will be exempted from taxation as against ₹10,000 earlier. TDS will not be required to be deducted under section 194A and it has been extended to all fixed deposit schemes and recurring deposit schemes.
- Income tax deduction limit on health insurance premium and medical expenditures incurred by senior citizens and senior citizens aged 80 and above, has been increased to ₹50,000 under Section 80D. This is significant as the number of people suffering from chronic ailments in this age bracket is significantly higher. But ironic however, is the point that middle class elderly who are pressured by medical expenses are exactly the ones who do not have a medical insurance policy in the first place! So this move, is only going to benefit a niche section – those who pay tax and those who have insurance.
- For individuals who are below 60 years of age, no change has been proposed. The deduction under section 80D for them continues to be Rs25,000. This includes deduction on account of preventive health check-up up to Rs5,000.
- Expenses incurred on critical illness by senior citizens will be exempted up to ₹1 lakh. Earlier it was ₹60,000 for senior citizens and ₹80,000 for very old senior citizens.
- Extension of the Pradhan Mantri Vaya Vandana Yojana (PMVVY) up to March 2020 under which an assured return of 8 per cent is given by Life Insurance Corporation of India. The existing limit on investment of ₹5 lakh per senior citizen under this scheme is also being doubled to ₹15 lakh. (The PMVVY scheme can be purchased offline as well as online, through Life Insurance Corporation of India (LIC), which has been given the sole rights to operate it.)
- This Union Budget, the Govt. has empowered country’s senior citizens with more power to invest. So, a middle class couple, both senior citizens, can invest up to ₹15 lakh separately, or maximum Rs. 30 lakh by putting together in the Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme and can earn an interest of ₹49 lakh a year from it.
- The Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme is at par with other schemes for senior citizens such as Senior Citizens Savings Scheme, which offers a similar return of 8.3% per annum currently. In the current falling interest rate scenario, fixed 8.3% annual return is a good option.
- Though there are some beneficial sops for the middle class elder, there is still much left desired vis a vis the poor elder, particularly in the area of old age pension, which finds no mention in the budget at all. Currently the contribution from Government of India to old age pension is a meager Rs.200/- per month, (HelpAge India for about a decade, has been advocating an increase in old age pension for the elderly, to at least amounting to Rs.2000/- per month as Universal Pension across India, which seems absolutely neglected). So while the middle class benefits to some extent, the destitute elder from the lower socio-economic strata has been left completely by the sidelines.
- According to the 2011 census, among the 103 million elderly citizens, 70 million are from the lower strata. For these people, the finance minister has announced a medical insurance cover. But medical insurance isn’t what they need as much as they desperately need a pension first.
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