Senior citizens of the country have high expectations from this time’s Union Budget 2025. The elderly, who depend on pension and interest income, have been hit hard by rising inflation, especially on food items and medical expenses. Moreover, rising borrowing and medical expenses are further adding to their financial burden. In such a situation, if Finance Minister Nirmala Sitharaman takes relief steps for them in the upcoming budget, it will be a big relief for them. Let us know what are the main expectations of senior citizens from this budget.
1. Increase in income tax exemption limit
Currently, income tax rules divide senior citizens into two categories:
- Senior citizens (60-80 years): Income tax-free up to ₹3 lakh annually.
- Super Senior Citizens (80+ years): Income tax-free up to ₹5 lakh annually.
However, considering the current inflation and rising expenses, this limit is quite low. Tax experts say that:
- The tax-free limit for both categories should be increased to ₹10 lakh.
- This step will financially empower senior citizens and make their lives easier.
2. Need for more deduction on health insurance
Currently, under the old regime of income tax, senior citizens get a deduction of up to ₹50,000 on health insurance premium.
- Problem: There has been a huge increase in health policy premiums after Covid-19.
- Solution: The government should increase this limit to ₹75,000 or ₹80,000.
This step will help the elderly to bear the rising expenses of health insurance.
3. Exemption from income tax return filing
At present, senior citizens who receive income only from pension and interest income are exempted from filing income tax returns after the age of 75 years.
- Suggestion: By removing this age limit, this relaxation should be extended to all senior citizens with pension and interest-based income.
- Benefit: This will provide relief to crores of elderly people and get rid of the complexities of return filing.
4. Tax exemption on NPS pension
Currently under National Pension System (NPS):
- 60% of the total fund is tax-free.
- The remaining 40% is used to buy annuity, from which pension is received every month.
Problem: This pension income is taxable.
- Suggestion: Pension income received from annuity should be made tax-free.
- Benefit: This will give more financial independence to the elderly.
5. Special deduction on medical expenses
With increasing age the need for medical care and tests increases.
- Suggestion: Allow deduction of up to ₹1 lakh annually on medical expenses, such as OPD, tests and other treatments.
- Benefit: The elderly will get relief from the huge expenses on health services.
