One of the main worries most senior citizens have is having limited or no money. Majority of people falling in the senior citizen category are retired from their jobs or have handed over their businesses to their successors. A lot of them depend on their pension or the savings to run their expenses, which is only becoming challenging with the increasing cost of living in today’s time.
However, the good news is that the Government of India and several private organizations have come forward to offer many financial benefits for senior citizens in India. The 2019 Budget also brought forward many advantages for senior citizens. Therefore, turning 60 comes with its own set of perks monetarily.
Here are some benefits you should know about, if you are an older adult in India:
1. Higher Deduction Limit for Medical Insurance Premium
Medical insurance policy premiums qualify for tax benefits under Section 80D of the Income Tax Act. The amount of tax benefit depends on the age of the individual who has undertaken the policy. A person below 60 years of age can avail up to ₹ 25,000 tax deduction based on his/her medical insurance, including self, spouse, children, and parents. If the individual is paying a premium towards a health policy for his/her parents who are senior citizens (60 years or above), he/she can get tax benefits of up to ₹ 30,000.
Therefore, if a taxpayer is below 60 and his/her parents/spouse are above 60, he/she can avail tax deductions of ₹ 55,000. If both the taxpayer and his/her parents/spouse are older than 60 and the taxpayer is paying both their medical insurance premiums, he/she can avail ₹ 60,000 as tax benefits.
2. Higher Tax Exemption Limit
The Income Tax Department considers 60 as senior citizens and 80 as very senior citizens. The tax limit on the income of senior and very senior citizens has been raised. For a senior citizen, income up to ₹ 3 lakh is exempt from tax, income from ₹ 3 lakh to ₹5 lakh is taxed at 10%, income from ₹ 5 lakh to ₹ 10 lakh is taxed at 20% and above ₹ 10 lakh at 30%.
For a very senior citizen, income up to 5 lakh is exempt from tax, income from ₹ 5 lakh to ₹ 10 lakh is taxed at 20% and above ₹ 10 lakh at 30%.
3. Higher Limit for TDS
Most senior citizens in India depend on the interest they get from their savings (Fixed Deposits, Recurring Deposits, etc.). At the end of every financial year, they have to fill a 15H form to avoid tax on the interest. This year, the limit of tax exemption on the income from interest on savings has been raised from ₹ 10,000 to ₹ 50,000. This has come as a huge relief to older adults.
4. Senior Citizens’ Saving Scheme (SCSS)
This scheme is for senior citizens and early retirees. It is one of the most popular choices of older adults. Anyone above 60 can avail of this scheme from a post office or a bank. The scheme offers interest on deposits for up to 5 years, though it can be extended to a further 3 years after maturity. The interest rate for SCSS is 8.7%, payable quarterly. SCSS is popular because it offers the highest post-tax returns among all fixed income taxable products. It also provides tax benefits under Section 80C.
5. Higher Interest Rates on Fixed Deposits
Bank Fixed Deposits (FDs) offer additional interest to senior citizens. Most banks offer 0.5% extra on the interest rate applicable to others. Banks also offer higher rates of interest for any tax-saving account or pension account with them. The interest is payable in different ways – monthly, quarterly, and yearly. You can also choose to get them added to the amount of the next tenure (rollover).
6. Digital Life Certificate
For continuing to receive pensions, older adults who draw a pension need to submit a life certificate every year compulsorily. However, in some cases, the person may be unable to physically visit the bank to submit the certificate. To counter this issue, a digitalized biometric version of Aadhar card was introduced for senior citizens in 2014. It is called Jeevan Pramaan. This move came as a huge relief for older adults who are unable to go outside their homes due to several physical or mental disorders. It is an optional system and nearly 10 lakh pensioners have registered for it.
7. Loan Availability
Senior citizens aspiring to buy homes or property are in for a good time. Many banks have started offering home loans to senior citizens provided that they maintain a pension account. They can avail up to 50 times the monthly pension/income or 4 times the annual income with an upper limit of ₹ 75 lakhs. The EMI is around 50% of the monthly income and the tenure is not more than 15 years or the applicant reaches 75 years of age (whichever is less).
8. Travel Benefits
There are various benefits for senior citizens willing to travel. Air India offers up to 50% discount for senior citizens traveling in economy class for domestic travel. Besides, private airlines offer various offers to older adults. Railways also offer up to 50% discount to people above 58 years of age (Age 60 for males and 58 for females). Even buses that run on municipal and state transport corporations give concessions on bus fare and reserve seats for senior citizens.
9. Special Schemes
The government offers several senior citizen welfare schemes like Varishta Mediclaim Policy for seniors aged 60-80 years of age. LICs Varishta Pension Bima Yojana launched in 2017 guarantees assured pension to senior citizens after retirement for 10 years.
Other Benefits for Senior Citizens
Other than these there are other benefits for the elderly at banks and hospitals. There are separate queues for people over 60 for clinical examination. Many bank branches also have separate lines for the elderly. Railway stations and airports offer wheelchair services for older adults who are weak or unable to stand or walk for long distances at a time. Railway reservations make lower berth reservations a priority for senior citizens. There are also special accounts at banks for senior citizens and priority service at some branches.
Older adults also enjoy quicker services at Passport Seva Kendras. They are not required to go through the entire process of submitting an online application. They can directly walk-in and are served on a first-come-first-serve basis.
India is becoming a good place for older adults to live in, with its inclusive programs and financial incentives for people above 60.
Also Read: What is Preventive Geriatrics?
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