August 21 is celebrated as World Senior Citizens Day to recognise the achievements of the elderly population of our society. A senior citizen means a person who is 60 years, and above. This section of society is offered various financial concessions and benefits in India. With a growing elderly population, understanding these concessions becomes crucial to ensuring a better quality of life during retirement years.
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Pension schemes
Indian seniors can avail of various pension schemes, including the Employees' Provident Fund (EPF), Public Provident Fund (PPF), National Pension System (NPS), and Pradhan Mantri Vaya Vandana Yojana, among others. These schemes offer financial security and a regular income source after retirement.
Here's a look at the pension schemes for senior citizens:
| Pension Scheme Name | Entry Age | Maturity Age | Policy Term (PT) | Tax Benefits |
| National Pension Scheme (NPS) for Senior Citizens | 18-70 Years of age | 60 years of age (can be deferred up to 75 years of age) | Minimum 3 years of the lock-in period. | Income tax is exempted under Section 80C and Section 80CCD (1B) of the Income Tax Act. |
| Pradhan Mantri Vaya Vandana Yojana (PMVVY) | Minimum 60 Years of age. | 70 Years of age and above. | 10 Years | GST is exempted. |
| Senior Citizens Savings Scheme (SCSS) | Minimum 60 Years of age | Minimum 65 years of age (account extendable by 3 years) | Minimum 5 years | Income tax is exempted under Section 80C of the Income Tax Act. |
| OR | ||||
| Person b/w 55-60 Years of age who opted for Voluntary retirement/Superannuation. | ||||
| OR | ||||
| Retired Defense Personnel b/w 50-60 Years of age. | ||||
| Atal Pension Yojana (APY) | 18-40 years of age | 60 Years of age. | Minimum 20 years | Income tax is exempted under Section 80C of the Income Tax Act. |
| Varishtha Pension Bima Yojana (VPBY) | Minimum 60 years of age. | 75 years of age and above. | Minimum 15 years | Income tax is exempted under Sec. 80C of the Income Tax Act. |
| Employees Provident Fund (EPF) | 18 years of age and above. | 58 Years of age. | Minimum up to 50 years of age. | Tax is exempted if EPF contribution is up to Rs. 7.5 lakhs and earned interest are less than Rs. 2.5 lakhs. |
| Indira Gandhi National Old Age Pension Scheme (IGNOAPS) | NA | 60 Years. | NA | NA |
(Source: Policybazaar)
(Note: The Indira Gandhi National Old Age Pension Scheme (IGNOAPS) provides financial assistance to destitute elderly individuals.)
Healthcare discounts
Many hospitals and medical institutions across India offer special discounts on healthcare services, medicines, and treatments for senior citizens. The Central Government Health Scheme (CGHS) provides comprehensive healthcare services to government employees and pensioners at affordable rates.
Income tax benefits
Seniors can avail of higher income tax exemption limits, ensuring they pay lower taxes on their income. They can also benefit from deductions on medical expenses and insurance premiums under sections 80D and 80U of the Income Tax Act.
As per the old tax regime, the income tax slab rates for senior citizens for FY22-23 are as follows:
| Income slab (in Rs.) | Income tax rate |
| Up to Rs 3 lakh | Nil |
| Above Rs 3 lakh and up to Rs 5 lakh | 5% of income over Rs. 3,00,000 |
| Above Rs 5 lakh and up Rs 10 lakh | Rs. 10,000 + 20% of income over Rs. 5,00,000 |
| Above 10 lakh | Rs. 1,10,000 + 30% of income over Rs. 10,00,000 |
The income tax slab rate as per the new regime is:
| Income slab (in Rs) | Income tax rate |
| Up to Rs 2.5 lakh | Nil |
| Above Rs 2.5 lakh and up to Rs 5 lakh | 5% |
| Above Rs 5 lakh and up to Rs 7.5 lakh | 10% |
| Above Rs 7.5 lakh and up to Rs 10 lakh | 15% |
| Above Rs 10 lakh and up to Rs 12.5 lakh | 20% |
| Above 12.5 lakh and up to Rs 15 lakh | 25% |
| Above 15 lakh | 30% |
Additionally, every person whose estimated tax liability for the year is Rs 10,000 or more, is liable to pay advance tax. However, a senior citizen need not pay any advance tax, provided he has no income under the head 'Profits and Gains of Business or Profession'.
Senior Citizen Savings Scheme (SCSS)
This government-backed scheme offers 8.2 percent interest rates to senior citizens, providing them with a secure investment option. The investment limit for SCSS is Rs 15 lakh.
Banking services
Many banks provide special services and products tailored to senior citizens, such as higher interest rates on fixed deposits, preferential treatment at branches, and waiver of certain fees.
The rate of interest on senior citizen FDs in India ranges from 3 percent to 8.5 percent for most commercial banks. The tenures range from less than one year to more than five years. Apart from the additional rate of interest, which can be 0.50 percent more than what is offered to the general public, these fixed deposit accounts also offer a wide range of other benefits to senior citizens. The regular interest payout option can help them get a steady and reliable income stream in their post-retirement years.
They can even obtain a loan against the FD if required. A 5-year tax saver fixed deposit can also help in saving tax while earning additional interest, according to Bankbazaar.
Property tax discounts
Several state governments offer property tax discounts to senior citizens, reducing the burden of maintaining their homes.
Transportation benefits
Some states provide concessions on public transportation for senior citizens, including reduced fares for buses and metro services.
Legal aid and support
Elderly citizens can seek legal assistance through various NGOs and government initiatives aimed at protecting their rights and interests.
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