Budget 2026: Affordable Healthcare, Social Security Provisions In Senior Citizen Wish List

The Budget 2026 is to be presented on February 1. Ahead of this, expectations are rising across various segments, particularly for tax relief and generally for other policy changes. For senior citizens, the budget wish list includes more than the tax reliefs. The elderly population is growing rapidly and is projected to double by the middle of this century, compared to the current elderly population of around 14 crore in India. In this context, the Budget is expected to announce some well-planned income tax reliefs, strong social security provisions, more affordable healthcare facilities, and a robust senior care ecosystem.

Here, we discuss the seniors’ wish list, as explored with the experts.

Medical Inflation

The old tax regime provides a deduction up to Rs 50,000 on health insurance premiums, under Section 80D of the Income-tax Act, but it is not sufficient for seniors. Ashwani Dhanawat, Executive Director and Chief Investment Officer, Shriram General Insurance, suggest this limit be enhanced. “This limit should be raised to Rs 1 lakh or higher, especially for those purchasing independent health cover without dependents (spouse or children).

Debashish Banerjee, Partner, Deloitte India, rather suggests offering this deduction in the new regime as well. “Medical inflation in India is among the highest globally. A significant share of healthcare expenses is still met through out-of-pocket expenses or borrowings. This makes tax incentives under Section 80D an important mechanism to reduce financial strains on individuals. Thus, allowing deductions under Section 80D of the Income-tax Act, 1961 (corresponding section 126 of the Income-tax Act 2025 applicable with effect from 1 April 2026) could provide meaningful relief, considering that medical treatment and hospitalisation expenses are largely paid for by individuals,” says Banerjee.

He adds that the government should initiate discussions with insurers and hospitals and explore ways to contain healthcare costs, using a standardised billing practice and examining the pricing of certain procedures and medicines.  

Ayushman Bharat Yojana

The government expanded the healthcare scheme to all seniors aged 70 and above in 2024. But this leaves a 10-year gap in coverage for retirees who depended on employer group health insurance and don't have personal coverage. Inclusion of seniors aged 60 and above under the Ayushman Bharat Yojana for Rs 5 lakh coverage would be helpful to reduce the burden on retirees' pockets.

Says Dhanawat: “Health risks and chronic conditions begin to rise significantly from age 60 onwards. Earlier inclusion would enable seniors to get timely access to cashless hospitalisation and reduce catastrophic out-of-pocket expenditure.”

Besides, the coverage should include outpatient (OPD) consultations, preventive care, and chronic disease management, as most of the out-of-pocket expenditure goes towards these, says he.

Tax Reliefs

Unlike the old tax regime, the new tax regime does now allow a higher basic exemption limit for seniors, but a higher exemption limit could be helpful for them.

Gaurav Makhijani, Managing Partner, Makhijani Gera & Associates LLP, says, “Most senior citizens don’t have a regular income from salary, business, or profession. They are dependent upon pension, interest or rental income. Their expectation is to have a separate slab basis for them under the new regime slightly more favourable than that of a normal citizen, giving them some additional savings, considering their retirement funds are meagre and their income, if any, is not regular.”

“One would also be expecting the increase in the interest exemption limit and (higher) exemption from withholding tax on interest income. Some additional benefit of the standard deduction on rental income would be helpful,” he adds.

Senior Housing

The third category is senior housing, which is useful in changing family and societal structure but is mostly unaffordable for a middle-class retiree.

Ishaan Khanna, CEO, Antara Assisted Care Services, says, “We are seeing growing investor interest in senior-friendly healthcare and assisted living infrastructure, reflecting the growing recognition of India’s demographic shift and changing family structures. This momentum would be best supported if the Budget backed it with comprehensive policy provisions, particularly around insurance coverage for long- and short-term assisted living, and at-home care. This represents a critical affordability gap for seniors and their families to access a service that’s increasingly becoming a wellbeing need.”

Although senior housing is a growing segment, it does not yet have a unified regulatory framework specific to it.

“As demand for senior care rises, India has a timely opportunity to move from informal, fragmented, and ad-hoc solutions to a regulated, high-quality care ecosystem that delivers dignity, safety, and continuity of care for seniors,’ says Khanna, and adds that a budget announcement to support large-scale training of non-medical care professionals in geriatrics, building of standardised norms for assisted care, and formal recognition of care giving as a skilled, professional service would be useful.