CNBC-TV18 Budget Ballot | Senior Citizens yearn for cheaper medical insurance, healthcare, lower taxes

This was a recurring theme in the responses gathered by the CNBC-TV18 Budget Ballot initiative, in which boxes were placed at various locations across key cities with an invitation to citizens to make known their wishes to the Finance Minister ahead of the interim Budget.

Highlighting the need for affordable health insurance for the elderly, more than one person has suggested that the GST levied on medical insurance premiums for people above 60 years of age be exempted as a way to reduce costs. There are also requests that clauses allowing insurers to refuse coverage or claims for senior citizens based on pre-existing conditions be done away with.

As an alternative, some respondents even suggested a healthcare scheme specifically aimed at senior citizens.

Sridevipriya Narasimhan from Coimbatore says, “I am reaching out to you from Coimbatore representing my father who had a lengthy career spanning from working in a factory to becoming an LIC agent until the age of 75. Despite lacking a pension, he sustains himself through the interest generated from his savings. Unfortunately, a blood clot in his head at the age of 75 has rendered him unable to work. Despite diligent efforts to secure affordable health insurance from various companies, he faces difficulties due to pre-existing conditions... I am writing to request the implementation of a government-backed health insurance scheme.”

Narasimhan, who is also 50 years old, says she is willing to pay for such schemes, provided they guarantee a safety net for health emergencies senior citizens may face.

Taxation on any income earned on savings invested in Fixed Deposits also appears to be a pain point for many respondents. This is also being extended to dividend income earned by senior citizens, either through Mutual Funds (MFs) or direct equity investments.

Senior citizen Chandra Patel writes, “Please make investment interest tax-free because all investment is part of income set aside for our future plans. All these long-time, large savings get taxed again, and this becomes double taxation… I request you to make zero tax on senior savings having less than ₹2 crore in the bank account. The likes of a JRD Tata or an Amitabh Bachchan can afford to pay tax, a retired government servant can’t. We are that unlucky middle class who don’t qualify for government subsidy.”

Naru Srinivas Reddy from Hyderabad echoes these sentiments. “I‘m a senior citizen. I have paid income taxes regularly for the period 2010-20 during my service in the Central Warehousing Corporation. I retired on August 31, 2020. Now for all retired employees, interest on their Fixed Deposits is the only source of income. So exempt the interest on these FDs," Reddy says.

It's not just senior citizens who have pointed out the difficulties this segment faces. Many senior citizens are dependents themselves, and their supporters often have other dependents like spouses and children to tend to as well; in such cases, resources can get stretched.

Also on the wish list is a higher rate of interest on savings schemes and deposits by senior citizens, to offset to rising cost of living.

Many have asked for higher tax exemption limits for senior citizens, which will leave them with more cash in hand in their twilight years.

GJ Ghond from Pune points out, "In the New Tax Regime senior and super-senior citizens have been completely neglected as far as their Basic Tax  Exemption Limits are concerned. These limits for them have been kept at ₹3 lakhs, as applicable to the general public. These need to be raised to ₹5 lakhs and ₹7 lakhs, respectively, to remove injustice done to them. Likewise, in the New Tax Regime, they need to be given relief of deduction of income towards Health Insurance Premium up to ₹50,000 available under Section 80D, and Interest on Deposits up to ₹50,000 available under Section 80TTB."

And then there is a perceived aberration in the banking rules that one respondent says undercuts a senior citizen’s income.

Prakash Sitaramaiah from Bengaluru says, “The IT Act exempts the senior citizens from payment of Advance Tax. However, the banks make TDS on interest payments to such people. An assessed tax-paying senior citizen cannot submit Form 15H. I think that a TDS is nothing but a kind of advance tax, and so they (senior citizens) are denied from fully utilising the exemption given by the Act.”

Some of the other items on the wish list include a withdrawal of the 18% Goods & Services Tax (GST) levied on Elder Care Accommodation services; restoration of the railway concessions that were revoked during the COVID-19 pandemic, but have not been restored; an Old Age Pension of ₹3,000 to all senior citizens; a tax rebate on adult diapers and medicines; inclusion of dental care and disability apparatus like hearing aids in health insurance policies; and a National Dementia Policy.

The basis for these requests is not just that the elderly need to be looked after, but that these people have been instrumental in building the economy to what it is today; they and their efforts deserve to be recognised and honoured as India builds on the momentum and foundation they have set up, and moves towards becoming the third largest economy in the world.