Etala Rajender, MP from Malkajgiri Lok Sabha constituency, asked whether the Finance Ministry is planning to introduce tax relief which will provide tax exemption to senior citizens with annual income up to Rs 7.5 lakh and impose 5% income tax on income between Rs 7.5 lakh and Rs 10 lakh.
A big update has come regarding senior citizens. The central government has responded to giving them tax relief. In fact, in this year’s budget, the central government has increased the standard deduction limit from Rs 50,000 to Rs 75,000, giving relief to taxpayers in the central new tax regime. The revised tax slabs for the new tax system will be applicable from April 2025, which will save up to Rs 17,500 in tax for salaried employees. However, no separate relief was given for senior citizens.
Recently, an MP in the Lok Sabha raised a question about possible tax relief for senior citizens. Eatala Rajendra, MP from Malkajgiri Lok Sabha constituency, asked if the Finance Ministry is planning to introduce tax relief that will provide tax exemption to senior citizens with annual income up to Rs 7.5 lakh and impose 5% income tax on income between Rs 7.5 lakh and Rs 10 lakh.
Demand for exemption under old tax regime
The question did not clarify whether it was about the old tax regime or the new tax regime. However, the relief being requested suggests that exemption was sought under the old tax regime. Apart from this, the inquiry proposed to increase the existing deduction limit for investment in National Savings Certificate (NSC) for senior citizens from Rs 1.5 lakh to Rs 3 lakh.
What did the government answer?
Minister of State for Finance Pankaj Chaudhary said that the ministry reviews several proposals for amendment to the Income Tax Act, 1961 as part of the annual budget process. Currently, no such proposal is being considered by the ministry. He answered three questions.
Have the State Elderly Welfare Associations sought income tax amendments for senior citizens from the current financial year?
Will the government propose to provide tax exemption to senior citizens up to an annual income of Rs 7.5 lakh and impose 5 per cent income tax up to an annual income of Rs 10 lakh?
Will the tax deduction on National Savings Certificate investments for senior citizens be revised from Rs 1.5 lakh to Rs 3 lakh from this financial year?
He said the proposals under consideration for this year will not be implemented, but the discussion has underlined the urgent need for future reforms. Senior citizens and stakeholders will closely monitor Budget 2024 for any unexpected developments addressing their concerns. By checking this calculation, we can determine how much income tax a senior citizen earning Rs 10 lakh per annum would pay under the previous tax regime.
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