Benefits to Senior Citizens

http://www.moneycontrol.com/news/retirement/find-out-various-benefits-senior-citizen-can-avail_723753-1.html


From Income-tax to saving schemes to bank deposits, senior citizens have several benefits they can avail of.


According to the data available with the Ministry of Social Justice and Empowerment in India, the number of senior citizens, which was 70.69 million in 2001, is expected to go up to 173.18 million in 2026. The Ministry of Social Justice classifies anyone above 60 as a senior citizen.


However, the simple definition of senior citizens is interpreted differently by different organizations. 
An insurance company considers a person who is 55 as a senior citizen. However, the income-tax department defines a senior citizen as someone who is 65. This creates problems for senior citizens dependent on deposit interest or pension income. Though most of them retire when they are 58 or 60, they have to wait for five to seven years before they can enjoy the benefits of higher tax concession.


Being a senior citizen, the first thing that one needs to address is finances. The following is a chronicle of how being a senior citizen can make an impact on your personal finances.

Income-tax: Income-tax is one area where the benefits provided to senior citizens start at Rs 2.25 lakh (the highest bracket). But the qualifying age for this is 65 years. Here, the government not only allows more money for them, but also makes leeway for bigger deductions. Medical insurance is one such example.

Senior citizen’s policies are more expensive and the government does consider this. As a result, the deductible amount for senior citizen’s insurance policy is Rs 20,000. This is Rs 5,000 higher than what a younger person would pay. As a senior citizen if you fall in the highest tax bracket, this would still amount to a tax saving of Rs 1,500.

The income-tax department has also kept the basic exemption high. For men, there is no tax on the income of Rs 150,000. But senior citizens are exempted from tax if their income is less than Rs 225,000. This translates into savings of Rs 7,500 in taxes.

Even if you compare the exemption limit of women senior citizens with a younger one, the tax benefit works out to Rs 4,500. The basic exemption limit for women is Rs 1, 80,000.

Bank Deposits: 

This is an area where the elderly get to earn more on their investments. Banks offer a higher rate of interest on fixed deposits to senior citizens. The offering is 0.5-0.75% more than the prevalent interest rates. The minimum age to get a premium on your deposit is 60.

A younger age group person can also enjoy this benefit if he opens a joint account with a senior citizen. But the deposit needs to be in the name of the elder one.

Senior Citizen Savings Scheme: 

The annualized interest rate in the Senior Citizens Savings Scheme (SCSS) is 9%. The entry age for this scheme is the same as the one required for Fixed Deposit, that is, 60. But the government has given some leeway for retirees. A person who is retiring and has crossed 55 years of age is allowed to invest in this scheme, if the money is invested within a month of receiving the amount from the employer. The tenure of this deposit is five years.

Insurance: When it comes to insurance, especially health, it gets difficult for senior citizens to get an adequate cover. Most insurance companies do not provide insurance for a person above 55 years of age. Some companies who provide cover, charge an exorbitant amount.

Others:

The Ministry for Social Justice and Empowerment, the nodal Ministry responsible for the welfare of senior citizens offers various schemes for their benefit. These schemes encourage non-governmental organizations to construct more old age homes and multi-care centers and mobile medicare units.

The Ministry of Road Transport and Highways mandates the reservation of two seats for senior citizens in front row of the buses of the State Road Transport Undertakings. 

The Ministry of Railways provides 30% fare concession in all Mail/Express (trains) including Rajdhani, Shatabadi, Jan Shatabadi for senior citizens aged 60 years and above. 

Under the diktat of the ministry of civil aviation, Indian Airlines provides 50% senior citizen discount on normal Economy Class fare for all domestic flights to Indian senior citizens who have completed the age of 65 years in the case of male senior citizens and 63 years in the case of female senior citizens, subject to certain conditions.

Air India also offers discount to senior citizens above 60 years on flights to the US, UK and Europe. Some private airlines such as Jet Airways also offer 50% discount on basic fare for travel on its domestic flights only to senior citizens who have attained the age of 62 years. Discount is applicable in economy class only.

The Department of Telecommunications also mandates that faults and complaints of senior citizens are given priority by registering them under the senior citizens category with VIP flag, which is a priority category. Further senior citizens are allowed to register a telephone connection under N-OYT Special Category, which is a priority category. Apart from the various ministries, it is mandated that courts in the country accord priority to cases involving older persons and ensure their expeditious disposal.