Salaried vs senior citizens: A wishlist of pre-budget expectations on tax relief
2 min read . Updated: 30 Jan 2023, 09:00 PM IST
Premium- Experts believe that there will be an increase in the 80c limit and minimum tax slab for tax saving for salaried employees and for senior citizens deductions under section 80TTB should be enhanced.
On February 1st, Finance Minister Nirmala Sitharaman will deliver the Union Budget 2023 for the fifth time. According to prior schedules, the presentation may commence at 11 AM. A number of tax specialists believe that the government may give income tax relief to ordinary individuals, including salaried employees and senior citizens. Experts believe that there will be an increase in the 80c limit and minimum tax slab for tax saving for salaried employees and for senior citizens deductions under section 80TTB should be enhanced. Based on an exclusive interview with Dr. Suresh Surana, Founder, RSM India, the spokesperson has highlighted a wishlist of pre-budget expectations on tax relief for both salaried employees and senior citizens.
Pre-Budget Expectations for senior citizens
Senior citizens avail a deduction u/s 80TTB of the Income Tax Act, 1961 (hereinafter referred to as ‘IT Act’) pertaining to income which is in the nature of interest on deposits with a specified banking company or a co-operative society engaged in the business of banking or a Post Office of upto Rs. 50,000 in a particular Financial Year. Such limit may be enhanced to Rs. 75,000 considering the present rate of inflation and that the said limit has not been enhanced since the last 5 years.
Considering that health issues are one of the major concerns faced by the senior citizens and the rising medical expenditure, the threshold limit for claiming deduction u/s 80D of the IT Act pertaining to health insurance or mediclaim premiums should be raised from Rs. 50,000 to Rs. 75,000.
Also, the provisions u/s 194P of the IT Act exempting resident Senior Citizens aged 75 years and above from filing income tax returns has pension income and interest income only & interest income accrued / earned from the same specified bank in which he is receiving his pension may be extended to senior citizens aged 65 years and above so as to enable senior citizens from facing hardships in furnishing their tax returns.
Pre-Budget Expectations for salaried individuals on tax relief
The salaried employees may expect an increase in the standard deduction for salary u/s 16(ia) of the IT Act which is currently at Rs. 50,000/-. The said limit may be raised to Rs. 75,000/- per annum considering the constant increasing cost of living and rising trend in the level of inflation.
Further, the threshold limit of deduction u/s 80C of the IT Act pertaining to investment linked deductions [Public Provident Fund (PPF), Employee Provident Fund (EPF), LIC premium, Equity Linked Saving Scheme (ELSS), National Saving Certificate (NSC), etc.] could be raised from Rs. 1,50,000 to atleast Rs. 2,00,000/- as the said limit under the aforesaid section was last revised in Budget 2014 and an upward revision is long overdue.
Lastly, the budget may provide for convergence of the old as well as the concessional tax regime since most of the salaried taxpayers are not able to avail the benefit of the new tax regime which provides restriction on most of the deductions/ exemptions and as a result many of the salaried taxpayers are reluctant to opt for the concessional tax regime considering the complexity of rigidity of such regime.
