For senior citizens, rising cost of living and medical expenses are major causes of concern. To provide relief in this regard, here are some of the expectations of senior citizens that may be covered in the forthcoming budget:

Basic exemption limit

With increased life expectancy due to availability of better medical facilities, making the income last for the lifetime poses a big challenge for senior citizens. Further, the difference between basic exemption limit for ordinary citizens and senior citizens is just Rs 50,000 and has not been revised since 2014. Thus, basic tax slab can be raised to Rs 3.5 lakh and Rs 6 lakh for senior citizens (60-80 years of age) and super senior citizens (above 80 years of age), respectively.

[Read: Will the Budget 2020 Bring Cheer For Taxpayers?]

Tax rebate on SCSS

Senior Citizen Saving Scheme (SCSS) is one of the popular schemes for citizens above 60 years of age, offering a high interest rate of 8.6%. However, the interest on SCSS is fully taxable, which is a major drawback of the scheme. The government may consider providing full tax rebate on SCSS in the upcoming budget. As per SBI's Ecowrap research, it will be fair if such amount is given full tax rebate as the revenue foregone by the government could be only Rs 3,092 crores, which will have minimal impact on government fiscal deficit.

Tax exemption on health insurance premium/medical expenses

Healthcare inflation is rising at a faster rate than the headline inflation. Considering that health is a major concern among senior citizens, the tax exemption limit under Section 80D can be raised to Rs 75,000 from the current Rs 50,000.

[Read: Budget 2020: The Common Man's Wish List That Can Spur Economic Growth]

GST levy on insurance

Levy of GST on health insurance premium is at 18% which increases the cost of product. Since the premium on health insurance policy for citizens is higher, eliminating of GST will bring down the cost of policy, thereby making insurance affordable.

Standard health product

The government may consider introducing a standard healthcare product for senior citizens on the lines of Ayushman Bharat Yojana - a health cover focusing on the poor and vulnerable families of the country. This would help improve accessibility to quality healthcare for all senior citizens.

Tax exemption on interest income

Interest income from bank deposits, post office deposit is sometimes the only source of revenue for retirees. During the budget 2018, the government had increased the deduction limit for interest earned on such deposits to Rs 50,000 from Rs 10,000 for citizens. As interest rates are declining, government may consider further raising this limit to Rs 1 lakh.

[Read: AMFI Rolls Out Proposals to Make Mutual Funds More Investor Friendly]

Dedicated funds and self-employment opportunities

According to a survey by Agewell Foundation, lack of dedicated funds and self-employment schemes in India are contributing to the sorry state of elderly in India. Among the over 1,500 senior citizens surveyed across 15 major cities in the country, at least 71% emphasised the need for dedicated funds for the senior citizens at national level, which can support senior-citizen friendly projects such as old age housing schemes, old age trauma centres, old age mobile medicare services, old age recreation clubs, old age pilgrimage, etc.

Furthermore, about 56% senior citizens (primarily in the age group of 60-70 years) said that government must launch self-employment schemes for the retired senior citizens on a larger scale to offer them gainful engagement opportunities in old age.

Separate investment window under Section 80C

As per media reports, government is looking at creating a separate window for life insurance policies under Section 80C since life insurance is different from other investment instruments. Additionally, it may be considering revisiting the limit under Section 80C which is currently capped at Rs 1.5 lakh. This has been a long standing demand of the insurance industry. If announced, this will be a welcome step for all individuals (including senior citizens) as it will provide additional opportunity to save and also ensure that more people buy life cover.

Better safety of deposit

Banks deposits are the most favoured investment avenue of senior citizens. In the past, there have been instances of financial crisis at banks which led to RBI imposing withdrawal restrictions on its customers. Senior citizens, many of whom had their life time worth of saving locked away in bank deposits could not access their own money.  Thus, Deposit Insurance and Credit Guarantee Corporation (DICGC), a subsidiary of the RBI, should consider hiking the deposit insurance limit from the current Rs 1 lakh.

If the concerns of senior citizens are addressed, it will create a friendly environment for the senior citizens and empower them to contribute towards the development of the nation.

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