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Monday 12 February 2018

Budget 2018-Sops for Senior Citizens

It has been proposed to increase the deductions available to senior citizens towards interest, health insurance and medical expenses as outlined below.
The above proposals will effectively increase the deduction available for senior citizens by up to INR 100,000.
*For the purpose of section 80 DDB, the distinction between senior citizen and very senior citizen has been removed.
** The scope of deduction has been widened to include interest earned on fixed deposits and post office deposits under the proposed insertion of section 80TTB for senior citizens.

Tax deduction at source in respect of interest income to senior citizen
Section 194A of the Act is proposed to be amended so as to raise the threshold for deduction of tax at source on interest income for senior citizens from existing INR 10,000 to INR 50,000. The proposed amendment shall be applicable with effect from 01 April, 2018.

National Pension Scheme (NPS)
It is proposed to extend the exemption available in respect of withdrawal (on closure or opting out) from the NPS scheme to all subscribers. Currently, exemption of 40% of the amount payable was allowed to employees. The proposed amendment shall be effective from 01 April, 2018.

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