Financial Benefits and Investment Schemes for Senior Citizens

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The population of Senior Citizens in India is increasing due to better living standards, good facilities, modern lifestyle and better availability of medicines and hospitals which provides assistances to spend an active and long life. In India and Australia, the age criteria for senior citizens is 60 years while in Canada and UK the same is fixed as 65 years. A healthy and physically fit person can continue his employment even at the age of 60 and/or 60 plus also. The Government has enshrined various social security measures for the welfare of Senior Citizens under the Directive Principles of State Policy of the Constitution. The State is also duty bound to make various schemes and initiate development programs for Senior Citizens. Apart from providing concessions in Railway Ticket,Fair and concessions in bus to female senior citizen passenger, there are various financial and investment schemes for the monetary benefits of those persons who have completed 60 years of age.

Benefits available for senior citizens are available in the following spheres:

  1. Investment in Bank Schemes, FDs etc.

The only small saving scheme for senior citizen is “Senior Citizen Saving Scheme” which is a five year saving plans. Deposit in this schemes can be made in Public Sector Banks (PSBs) and nearby post offices also. The current rate of interest is 8.30% on this scheme which is higher than usual rate of interest available on Fixed Deposits FDs etc. A senior citizen can invest maximum Rs. 15 lacs in “Senior Citizen Saving Scheme” for five years for better returns.

However, the rate of interest on FDs in the name the senior citizens is 0.25% or 0.50% higher than the current rate of interest for general people.

  1. Exclusive Exemptions Available in the Income Tax Act, 1961 and exemptions as Announced by the Government from time to time.
  • The minimum exemption available to senior citizens who are above 60 years and below 80 is Rs.3,00,000 while it is Rs.2,50,000 for below 60. Similarly those who have attained the age of 80 years come under the category of super senior citizens and they are exempted from payment of income tax upto an annual income of Rs.5,00,000.
  • An exemption of Rs.50,000 u/s 80TTB of Income Tax Act, 1961 on interest income from deposits in savings account and post office will be allowed from the financial year 2018-19 to senior citizens.
  • Deduction available under section 80D: This section provides deduction in total taxable income upon medical treatment of senior citizen. A deduction of Rs.30,000 was being allowed till financial year 2017-18, now it has been revised in union budget 2018 and has increased up to Rs. 50,000 from the financial year 2018-19.
  • Deduction available under section 80DDB: 80DDB of Income Tax Act has allowed a special deduction in taxable income on treatment of serious illness of senior citizens like brain disease, cancer, AIDS etc. this section allows a deduction of Rs.1,00,000 on taxable income. A senior citizen taxpayer can avail this deduction for treatment of serious ailment of self, spouse, children, brother and sister.
  1. Special Insurance Schemes for Senior citizens.

Various insurance schemes are available for senior citizens by various insurance companies like Life Insurance Company of India has launched “Varishth Pension Bima Yojna” which gives guaranteed return of 8% for a period of 10 years. Maximum amount that can be invested in this Bima Yojna is Rs.7.5 Lacs. This scheme is good enough for senior citizens as it has no technicalities like there no medical check-ups requirement for claim benefits of this scheme and it is easy to surrender this policy and rules are more flexible. Similarly the National Insurance Company has also provides “Varishth Medi-claim Policy” for senior citizens in which they can claim Rs. 1 to 2 lakhs for various medical treatment and hospitalization.

Concessions in Air travel, Railways and Bus travel is also available to senior citizens from 40 to 50% of the basis fair. Registration and installation of telephones from BSNL and MTNL also offer priorities and concessions to the senior citizens.

In this way, Seniors Citizens are given preferences in various sphere of life whether financial or non-financial. Indian Traditions, customs and beliefs also consider senior citizens as most respected because of their better intellect and experience.

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