Budget 2025-26: Tax Expectations For Senior Citizens

Outlook Money

Linking TDS with Tax Liabilities

To avoid unnecessary tax deductions, the threshold for Tax Deducted at Source (TDS) on interest income should be aligned with seniors’ actual tax liabilities and the government could eliminate the need for submitting Form 15H.

Exemption From ITR Filing

current ITR exemption limit of 75 years must be lowered to 60 as the income stream stops and the only source to rely upon is savings and pension. 

Tax Exemption Limit

Basic Exemption Limit 

Experts propose increasing the limit for seniors to Rs 7 lakh from the current limit of 3 lakh, considering high inflation and the fact that nearly 78 per cent of seniors in India live without pension coverage.

Exemptions & Deductions

Section 80D Deduction

Seniors currently receive a Rs 50,000 deduction on medical insurance premiums. With medical inflation running at around 12-14 per cent, experts recommend increasing the deduction limit to Rs 1 lakh.

Interest Income Threshold 

It is recommended to increase the deduction limit under Section 80TTB from Rs 50,000 to Rs 1,00,000, citing inflation and rising healthcare expenses as key reasons for this revision.

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