NEW DELHI: Industry body Assocham recommended increasing minimum tax exemption limit for senior citizens, that is, people from age 60 to 80 years of age.
In its pre-budget memorandum, the chamber suggested raising the exemption limit for people falling under this age group to Rs 7.5 lakh.
For very senior citizens, that is people aged above 80 years, Assocham recommended exempting them from tax if income is up to Rs 12.5 lakh.
Currently, the maximum amount of income which is not chargeable to income tax is Rs 2.5 lakh. In case of persons in the age bracket of 60-80 years, it is Rs 3 lakh and Rs 5 lakh for senior citizens who are above the age of 80.
Assocham said that the people in this age group are hugely dependent on interest income from fixed deposits. "The rate of interest income has come down drastically inn the past one year leaving senior citizens in financial difficulty," it said.
The industry body further suggested that there should not be any tax deducted at source (TDS) from payment of interest to senior and very senior citizens.
"Actual inflation is much higher than headline inflation numbers. Besides, medical expenses have shot up heavily in old age and persons covered by Mediclaim insurance policies have to cough up very high insurance premia after 1-2 claims," the memorandum added.
Currently, the health insurance premium for a senior citizen is eligible for deduction to the extent of Rs 50,000.
