Government Addresses Concerns Over Senior Citizens’ Income Tax Revisions

In a Lok Sabha session held on November 25, 2024, an unstarred question raised by Shri Eatala Rajender spotlighted the growing calls for income tax relief for senior citizens. The question encompassed potential changes in tax rebates and deductions for senior citizens, reflecting concerns voiced by various Elder Welfare Associations across India. Here’s what the government had to say.

Key Questions Raised in the Lok Sabha

1. Demand for Tax Revisions:
   Elder Welfare Associations urged the government to revise income tax policies for senior citizens starting from the current fiscal year.
2. Proposed Tax Rebates:
   Queries included whether the government intends to introduce a full tax rebate on annual incomes up to ₹7.5 lakh and levy a minimal 5% income tax for incomes between ₹7.5 lakh and ₹10 lakh.
3. Enhanced Savings Benefits:
   The suggestion to increase the tax deduction limit on National Saving Certificate (NSC) investments for senior citizens from ₹1.5 lakh to ₹3 lakh was also tabled.

Government’s Clarification

Responding to the inquiries, Shri Pankaj Chaudhary, Minister of State in the Ministry of Finance, clarified:

• Ongoing Deliberations: The government regularly receives numerous suggestions and proposals during the annual budget exercise. These are carefully reviewed, and any decisions are reflected in the Finance Bill presented in Parliament.
• No Immediate Plans: As of now, there are no formal plans to revise the income tax slabs for senior citizens or increase the NSC deduction limits.

What This Means for Senior Citizens

For now, senior citizens may not see any immediate changes in income tax structures. However, the possibility remains that these suggestions could be reviewed in future budget deliberations. Here’s a quick recap of what’s on the table:

• Current Situation:
  • Tax rebate: Up to ₹5 lakh annual income (as per existing provisions).
  • NSC investment deduction: ₹1.5 lakh.
• Proposals Under Discussion:
  • Full tax rebate: Income up to ₹7.5 lakh.
  • 5% tax: Income between ₹7.5 lakh and ₹10 lakh.
  • NSC deduction: Increased to ₹3 lakh.

While these proposals could significantly ease financial burdens, their implementation will depend on future budget announcements.

Why This Matters

The growing senior citizen population in India faces unique financial challenges, particularly in managing post-retirement savings amidst inflation. Enhanced tax benefits can help alleviate these pressures, offering greater financial security.

View the original Parliamentary Question & Reply below: