I am a retired 60+ man. I come under the senior citizen group who is surviving with his wife on a ‘limited’ income that comes through interest from fixed deposit saving in a bank. But the dwindling interest rates has made it difficult for me to make both ends meet. Since a long time, I have voiced my grievances in several fora but with no result. This year too, since I came to know that the budget was to be presented on February 1, I expressed my anxiety about the kind of budget that would be presented and also my wish as to the kind of financial plan I was expecting. On the day of the budget, I was glued to my TV waiting for the Finance Minster Nirmala Sitharaman to come and present her budget 2020-21.
Finally, FM came in and started her long speech while presenting the budget. Initially she proposed a new tax regime slashing income tax rates and rejigging income tax slabs to reduce total tax payable by individuals. As announced in the new tax regime, 70 tax exemptions will be removed but the income between Rs 5 lakh and Rs 7.5 lakh will be taxed at 10 per cent down from current 20 per cent, income between Rs 7.5 lakh and Rs 10 lakh will be taxed at 15 per cent down from current 20 per cent, and income between Rs 10 lakh and Rs 12.5 lakh will be taxed at 20% down from current 30 per cent. Income between Rs 12.5 lakh and Rs 15 lakh will be taxed at 25 per cent down from current 30 per cent. Incomes above Rs 15 lakh in a financial year will continue to be taxed at 30 per cent.
Budget 2020 has offered taxpayers the option to choose between the existing income tax regime (which allows availing (income tax exemptions and deductions) and a new tax regime with slashed income tax rates and new income tax slabs but no tax exemptions and deductions. The new tax regime offers lower tax rates and new tax slabs and simultaneously removes tax exemptions and will result in lower tax outgo for the tax payer, according to the finance minister.
After some time the FM came up with the topic of relief to senior citizens. She announced new income tax slabs for senior citizens. She also announced a package of Rs. 9,000 crore which would be used for the welfare of senior citizens along with the differently-abled citizens.
As per the new tax slabs, the senior citizens aged 60 years and above but below 80 years, with an income up to Rs 3 lakh is exempted from tax. Similarly, the super senior citizens, aged 80 years and above, with an income up to Rs 5 lakh are exempted from tax.
However, senior citizens are not much impressed by these announcements. Most senior citizens, who usually survive on a ‘limited’ income such as a pension and interest were expecting some more announcements so that they could cope with the price hikes on almost every essential service. But they were bereft of any happy announcement. Here I want to say that the government must understand that we have limited income and we are the ones who suffer from some or the other ailment. To get ourselves treated, we go to hospitals and end up paying lakhs for treatment. There is no hike in the interest rates of fixed deposits. “The government has ignored us,” I cried. When I spoke to one of my friend Deepak Gagwani, he said, “I appreciate the government for the new tax slabs but at the same time, something more was expected for senior citizens. Like for medical expenditure, we are allowed to deduct Rs. 50,000 from out income tax now. The government could have enhanced this amount given the ever-increasing medical expenses.”
On the other hand, my neighbour Vinay said, “I am satisfied with whatever has been allocated for senior citizens. I can say that the greed to have more would never go and thus we should accept whatever we are given. The government obviously has other expenses too.”
Lastly, I want to congratulate the FM for dishing out a comprehensive budget.