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Minor relief for middle class

Business Standard 

For the middle class, the did not have much to offer. According to experts, the government might have decided to leave most things unchanged in view of falling inflation. Most of the reforms were focused on the lower middle income group and senior citizens.

Only two important changes would benefit general taxpayers (non-senior citizens). Under Section 80D of the Income-Tax Act, the government increased the deduction limit for health insurance premium from Rs 15,000 to Rs 25,000. For senior citizens, the limit was raised by Rs 10,000, which will now be Rs 30,000. Those above 80, not covered by medical insurance, can claim a deduction of Rs 30,000 towards expenditure incurred on their treatment..

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In his speech, the finance minister said the government would create a social security system for all Indians. Consequently, he raised the deduction limit for contribution towards the New Pension Scheme (NPS) by Rs 50,000. Under Section 80CCD, taxpayers can now claim deduction up to Rs 1.5 lakh. Employees will also get an option of choosing either the Employees' Provident Fund (EPF) or the NPS.

For the economically weaker section, the government announced three schemes. Pradhan Mantri Suraksha Bima Yojana will cover accidental death risk of Rs 2 lakh for a premium of Rs 12 a year. Atal Pension Yojana will provide a defined pension depending on contributions. Another life insurance scheme, Pradhan Mantri Jeevan Jyoti Bima Yojana, will cover both natural and accidental death risk of Rs 2 lakh for those aged between 18 and 50 years. The premium for this will be Rs 330 a year.

From the unclaimed deposits of about Rs 3,000 crore in the Public Provident Fund, and approximately Rs 6,000 crore in the EPF, the government plans to create a Senior Citizens' Welfare Fund. Details of the programme will be issued in March.

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First Published: Sun, March 01 2015. 00:36 IST
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