As salaried class and pensioners were anticipating some sort of rebate or other tax relief in terms of tax. Senior citizens were affected majorly by the worsening economic conditions as their sole source of income is the return on investments and to promote and inculcate the saving habit among women, the government has taken steps towards the same.
There are the following benefits given by the government in the budget 2023 to senior citizens and women:
Standard deduction introduction in NTR
Earlier, a standard deduction for salaried individuals of ₹50,000 was available to only those taxpayers who opted for the old tax regime, but in the budget 2023, it is available for new tax regimes (NTR) also.
For senior citizens, it is good news that even if you are opting for a new tax regime (NTR), you can claim a standard deduction over and above the basic exemption limit which are ₹3 lakhs now. However, if your income is up to ₹7 lakhs, you do not have to claim a standard deduction as a rebate is already available. But, if the income is more than ₹7 lakhs, claiming a standard deduction would also be available, which will save you a tax of ₹50,000.
Enhanced investment limit of SCSS
The government has decided to increase the investment limit of these two major schemes that are popular among senior citizens. The investment limit for senior citizen saving schemes is doubled from ₹15 lakhs to ₹30 lakhs, with an assured interest rate of 8% per annum to be paid quarterly. The interest is deductible under section 80C of the income tax act 1961.
Enhanced investment limit of PMOIS
Coming to the post office monthly income scheme (PMOIS), the investment limit has increased from ₹4.5 lakhs to ₹9 lakhs, in the case of a single account and the limit hiked from ₹9 lakhs to ₹15 lakhs in the case of joint accounts, with an assured interest rate of 7.1% per annum to be paid monthly. The interest is also deductible under section 80C of the income tax act 1961.
While in both the schemes are eligible for deduction under section 80C available for individuals opting for old tax regimes only. But, in the budget 2023, you, as a senior citizen opting for a new tax regime can also claim tax benefits not under section 80C but as the standard deduction of ₹50,000.
Small saving schemes for women
In the budget 2023, a new scheme is introduced by the finance minister, especially for women to inculcate the habit of savings and investing. Under this scheme, named Mahila Samman Saving Certificate, you, as a woman, can save a maximum deposit of ₹2 lakhs with an assured interest rate of 7.5% per annum for two years.
These savings schemes for women and tax deduction introduction for new tax regimes with an extended investment limit will help you in fighting inflation via saving for your future objectives. By utilising tax benefits and investment options, you can secure your future financially.
Anushka Trivedi is a freelance financial content writer. She can be reached at anushkatrivedi.com
