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5 Exclusive Financial Benefits for Senior Citizens

5 Exclusive Financial Benefits for Senior Citizens
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The government of India ensures that it is able to provide income and tax benefits to all the citizens across various age groups. Out of various economic, financial, and social benefits provided to senior citizens, the spectrum of financial benefits is the largest. Here is a list of five major financial benefits that the Government of India offers exclusively to its senior citizens.

Tax Exemptions and Deductions

The Government of India has always been considerate in terms of levying tax on female and senior citizens. The current financial year i.e. 2018-2019 has brought many tax benefits especially for senior citizens. Effective from 1st April 2018, here are the various tax exemptions and discount that will be available for senior citizens.

  • Tax exemption on income up to 3 lakh
  • The tax exemption on the interest income limit for senior citizen raised from Rs 10,000 to Rs 50,000
  • 5,000 concession in income tax liability and 25,000 for super senior citizens
  • Other travelling discounts i.e. 50% discount on air ticket rates and 40-50% discount on rail ticket rates

Government Saving and Investment Schemes

The government provides various savings and investment schemes for senior citizen to manage their finance post their retirement. All these schemes enjoy the benefit of the government tax exemption. Out of the many, one of the most popular schemes is the Senior Citizen Savings Scheme (SCSS), which is a monthly investment giving periodic high returns. The benefits of this scheme include:

  • High returns at interest rate of 8.50% per annum
  • Option of having multiple accounts, either individually or with a joint investor
  • Flexible tenor that can be stretched to 8 years
  • Monthly affordable investment

Apart from the SCSS, other government schemes like Rashtriya Vayoshri Yojana, Indira Gandhi Pension Scheme, Pradhan Mantri Vaya Vandana Yojana, etc. provide various tax benefits for senior citizens.

Special Provisions for FDs and Savings Account

Investment in senior citizen fixed deposit accounts with banks provides the benefit around 0.5% higher interest rate than the general 6%. However, investing in fixed deposits with Non-Banking Financial Companies provides a higher senior citizen fixed deposit interest rate of 8.20%. In addition to this higher interest rate, tax exemption on interest income up to Rs. 50,000 brings more return on investment for senior citizens.

The benefits of investing and saving with NBFCs are more as compared to investments in banks. You can open your FD account with a low investment of minimum 25,000 and enjoy high returns with Bajaj Finance.

Investing in senior citizen fixed deposit account with NBFCs is not only beneficial in terms of returns, but it is easy as well. You can open your FD (Fixed Deposit) account with Bajaj Finance instantly through online application with minimum documentation and enjoy guaranteed high returns.

Benefits on Loan

Along with enjoying periodic income through the saving schemes or the pension plans, urgent money can also be availed from it. Various banks and NBFCs provide home loans on pension accounts. You can get loan amount of about 50 times of your monthly income from pension. In the same way you can get a loan on 4 times the amount of your annual income.

You can avail loan up to an amount of 75 lakh. The tenure of the loan is of 15 years and citizens up to the age of 75 years can only avail it. While you can take home loan on your savings and pension scheme you can also avail instant personal loans against your FDs or other securities at lower rates of 9 to 12%.

Insurance Discounts

The tax benefits on investments in health/life insurance and mediclaims for senior citizens are also noteworthy. Under Section 80D the exemption on insurance premiums includes:

  • Deduction up to Rs. 25,000 for medical insurance premiums
  • Extended limit of maximum 15 lakh can be invested for medical insurance without medical check ups
  • Mediclaim of up to 2 lakhs for citizens of age group 60-80 years
  • Exemption up to Rs. 50,000 for insurance investment

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