Senior citizens require better healthcare, more tax relaxation and strong financial support from the government. Here are some of the key expectations from senior citizens from Union Budget 2025
Union Minister of Finance Nirmala Sitharaman is set to deliver the Budget Speech on February 1, 2025. In the run-up to the Budget Speech, people from across different sections of society and business and industry have expressed their expectations from the budget.
The senior citizens are also looking forward to the Budget Speech, and an increase in the tax exemption limit, better insurance coverage and increased pension are some of their demands.
According to a Press Information Bureau (PIB) memo released in August 2024 on world Senior Citizens Day, the current population of senior citizens in India, which is nearly 150 million, will reach 200 million.
This rapid increase in the population of this demographic requires many provisions and facilities to lead a comfortable life.
Tax exemptions, better insurance coverage, increase in pension to sustain a dignified lifestyle, better senior living facilities, senior-friendly investment options, simplified procedure to get pension, make digital payments, open a bank account, and simplified government scheme enrollment process are some of the generic concerns of senior citizens from Budget 2025,
However, senior citizens have some specific demands from the Budget with regards to health insurance and taxation.
Senior citizens have called for health insurance for senior citizens to be a basic amenity considering the fragility of their health as well as the increased frequency of clinic or hospital visits for preventative care.
They have called for a wider coverage of senior citizens under the Ayushman Bharat Yojana.
Asheesh Gupta, founder and managing director of Samarth Eldercare shared his views on the same.
He said: “The Ayushman Bharat scheme has been a transformative step toward improving healthcare access for millions, and we hope the upcoming budget will expand its reach to include more senior-specific programs.”
To ease the burden of health expenses of senior care and provision of better care to senior citizens, he has suggested introduction of relevant tax incentives for eldercare expenses, increased support for home-based healthcare, and training initiatives for caregivers that can further strengthen the ecosystem.
He added: “This budget is an opportunity to deepen the government’s commitment to inclusivity and compassion, ensuring our elders who have been pillars of society are provided with dignity, respect, and the best quality of life.”
Senior citizens typically do not have any regular source of income, except for pension, rental income and interest income from deposits. However, senior citizens who have retired from the corporate or unorganised sector do not receive pension income . Also, not every senior citizen will have an additional real estate from which one can earn rental income. Bank deposits, which every senior citizen is likely to have, however, attract tax on interest irrespective of the amount earned even if the income is below the tax threshold limit. This interest earned, if taken into consideration with inflation, actually gives negative returns, leaving the seniors vulnerable and insecure.
Seniors are hoping for an increase in rebate under Section 87 A of the Income-tax Act, 1961, and tax exemptions from FDs and other government schemes, in addition to tax relief on medicines and healthcare.
Notably, the new tax regime allows senior citizens earning up to Rs 7.75 lakh in pension income to deduct Rs 75,000 and receive a Rs 25,000 rebate under Section 87A.
Suneel Dasari, CEO of EZTax.in, a tax filing portal, has called for an increase in the rebate for senior citizens.
He said: “Standard deduction might be increased to Rs 1 lakh, and rebate u/s 87A might be increased upto Rs 9 lakh, which will additionally save Rs 36,300.”
He further said that the people are highly anticipating that Budget 2025 will introduce more tax relief measures like Introduction of a new tax rate of 25 per cent for taxpayers with an income between Rs 15 and Ra 25 lakh under the new tax regime.
Alternatively, the current 30 per cent base rate could be increased to Rs 20 lakh.
He also suggested that deduction of tax at source (TDS) by banks and other financial institutions on earning of senior citizens from FDs and other government schemes, must be exempted entirely, as the deduction is being made even when the citizens is well below the income threshold.
Another suggestion is relaxation on goods and services tax (GST) on medicines and healthcare services that will benefit senior citizens highly.
There are several important considerations that could greatly improve the financial well-being of senior citizens in India ahead of Union Budget 2025.
Financial aspect of retirement or old age needs to be planned with careful consideration.
As the expenses increase and income stream stops, senior citizens need more financial stability than anyone.
Here are some recommendations shared by Sakchi Jain, a CA and Financial Educator
Simplification of Financial Processes for Senior Citizens: Expanding the exemption for seniors aged 75 years and above with small income sources could simplify tax filing and reduce paperwork.
Additionally, offering low-risk investment options like government-backed bonds with assured returns could encourage more seniors to invest confidently.
Expectations For New Schemes: Government-backed health insurance covering domiciliary care, pre-existing conditions, and long-term treatments would provide relief for seniors.
Affordable assisted living facilities and senior care centers would offer daily assistance.
Raising the Section 80D deduction limit for senior citizens from Rs 50,000 to Rs 1 lakh would also help reduce the financial burden of healthcare expenses.
Anticipated Changes In Existing Schemes: The proposed changes include increased interest rates on savings schemes like Senior Citizens Savings Scheme (SCSS) and Post Office Monthly Income Scheme (MIS), higher tax exemptions, and the extension of the Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme.
These measures will combat inflation, provide stable income for seniors, and increase their basic exemption limit.
Additionally, the PMVVY scheme, which offers pension benefits, can be extended with higher investment limits, ensuring financial security for seniors.
Potential Increase In Social Security Pensions: The Indira Gandhi National Old Age Pension Scheme (IGNOAPS) and a universal pension scheme are proposed to provide better support for economically disadvantaged seniors and offer financial stability to those without employer-backed retirement benefits, addressing the rising cost of living.
Financial Protection From Fraud: Financial institutions should implement advanced cybersecurity measures like two-factor authentication to protect seniors from online fraud. Financial literacy programs should educate seniors about common scams and fraud prevention. Establishing a dedicated helpline for seniors to report and receive immediate assistance is crucial for their financial safety.