How will Budget 2025 impact senior citizens?

Budget 2025 introduces tax relief measures for senior citizens, enhancing savings potential

Finance Minister Nirmala Sitharaman unveiled important tax relief initiatives for senior citizens in the Union Budget 2025. These measures include an increased tax deduction limit on interest income and more flexible withdrawal regulations for certain savings schemes.

 

“I propose to rationalise tax deductions at source (TDS) by reducing the number of rates and thresholds about which TDS is deductible. Further, threshold amounts for tax deduction will be increased for better clarity and uniformity. The limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 to Rs 1,00,000,” said FM in the Budget speech.

 

“The tax deduction limit for senior citizens will be doubled to Rs 1 lakh. This aims to provide greater financial relief to retirees by increasing the deduction on interest income from the current Rs 50,000,” Rajarshi Dasgupta, Executive Director, AQUILAW.

 

The TDS threshold for rent payments has been increased from Rs 2.40 lakh to Rs 6 lakh per year, simplifying compliance for numerous senior citizens.

 

The finance minister in her speech said, “A number of senior and very senior citizens have very old National Savings Scheme accounts. As interest is no longer payable on such accounts, I propose to exempt withdrawals made from NSS by individuals on or after August 29, 2024.”

 

The Finance Minister said that NPS Vatsalya accounts will be taxed in the same manner as regular National Pension System (NPS) accounts, within the overall limits.

 

These changes are expected to boost savings and reduce tax burdens for senior citizens, according to experts.