Arjuna (Fictional Character): Krishna, Union Budget for the year 2018-19 has been declared on 1st February. So what decisions are taken in that for taxpayers?
Krishna (Fictional Character): Arjuna, In this year, main focus was on Direct taxes rather than indirect taxes. The government has suggested certain changes in the income tax rate and deductions from the total income. In this budget, the government has focused on deduction provisions in case of senior citizen.
Arjuna: Krishna, Is there any change in the deduction of health insurance for senior citizens?
Krishna: Arjuna, Yes. Earlier as per Sec 80 D, senior citizens were allowed deduction for health insurance premium of Rs. 30000, which has been increased upto Rs. 50000 in this budget. It means from current year, senior citizens would be allowed to deduct Maximum Rs. 50000 as health insurance from total income. This limit for the normal Assessee is Rs. 25000. If the parents are dependent on the taxpayer and taxpayer paid the amount of health insurance, then this deduction is available from the total income of that taxpayer.
Arjuna: Krishna, Is there any deduction for the medical treatment for specified diseases for senior citizens?
Krishna: Arjuna, Yes. Under Section 80DDB, deduction for senior citizen is allowed from the total income for medical expenses paid on specified diseases upto some portion. Earlier the limit of this for senior citizens was Rs. 60000 and for Super senior citizens was Rs. 80000. But now this limit is increased upto Rs. 100000. It means for both i.e. senior citizen and super senior citizen, the deduction will be allowed of Rs. 100000. If the parents are dependent on the taxpayer and taxpayer paid the medical expenses of specified diseases, then this deduction is available from the total income of that taxpayer.
Arjuna: Krishna, is there any deduction for the interest received on the saving bank deposit?
Krishna: Arjuna, Section 80TTA provides a deduction of Rs 10,000 on interest income of saving accounts only. But in this budget, this limit for the senior citizens has been increased upto Rs. 50000. Section 80TTB is newly inserted in the act. As per this section, senior citizens are allowed deduction upto Rs. 50000 for post and bank saving interest as well as fixed deposit interest. Similarly, there is no applicability of TDS provision for senior citizens for this interest upto Rs. 50000.
Arjuna: Krishna, Who is senior citizen and super senior citizen?
Krishna: Arjuna, the person who has attained the age of 60 years or more is considered as senior citizen. Similarly, the person who has attained the age of 80 years or more is considered as super senior citizen.
Arjuna: Krishna, What lesson the taxpayer should take from this?
Krishna: Arjuna, this year, the government has concentrated on direct taxes and senior citizens. This year by taking into consideration the new budget, the taxpayers should pay the tax. Otherwise they will have to face online assessment from this year.