That old people in the final phase of limited human life span need a different treatment is recognized by the Medical Science too which has a separate branch for them called geriatrics. Financial advisers too advise old and retired people differently as their risk appetite and needs are different and the time span under consideration is shorter. Thus it is surprising that the government doesn't discriminate between retired and working people when it comes to taxing their income. Some minor concessions given to them earlier are being gradually wiped out.
The first point of contention is the rebate given on long term investments. These are often used by government to show that the actual income on which you need not pay any taxes is far more than the exemption limit. It is indeed prudent and advisable for a young working man to set aside a sizeable part of his / her income for a reasonable retirement corpus in old age. But to ask an old person who may not have much more than 5 years of life span left is illogical. For a senior citizen it is time to draw down his savings to supplement his reduced income and she can hardly afford to set aside a large chunk of her income just to get tax rebates. Thus it will be reasonable to raise the exemption limit for seniors over that for working people by the amount of total deductions for investments and savings that are permitted.
Again, contrary to what is believed by working people, expenses tend to go up after retirement. There are several reasons for it. When young you are able to do most of daily chores yourself. However an old person with much lower energy levels one has to depend on domestic help. One may also need a driver or have to depend on expensive private transport. Visits to doctors become more frequent and the expenses go up not only on consultation but also on medicines and supplements which more than make up for any reduction in your grocery and food bills.
While working most of us were unable to attend many social engagements like marriage, birth of a child and many of the numerous celebrations that keep taking place in the immediate and extended family. Once retired the calls on you to participate and give your blessings grow frequent and louder. Now, we all know that social commitments also call for a substantial financial commitment. In fact, expenses on social and family events form a huge part of expenditure in your budget.
Thus it can not be gainsaid that seniors also require a much larger standard deduction compared to young working people.
My submission is that it will be reasonable to give seniors a standard deduction of 2 lakhs along with an exemption limit of 8 lakhs. Also these limits should be linked to inflation and get automatically revised.
The first point of contention is the rebate given on long term investments. These are often used by government to show that the actual income on which you need not pay any taxes is far more than the exemption limit. It is indeed prudent and advisable for a young working man to set aside a sizeable part of his / her income for a reasonable retirement corpus in old age. But to ask an old person who may not have much more than 5 years of life span left is illogical. For a senior citizen it is time to draw down his savings to supplement his reduced income and she can hardly afford to set aside a large chunk of her income just to get tax rebates. Thus it will be reasonable to raise the exemption limit for seniors over that for working people by the amount of total deductions for investments and savings that are permitted.
Again, contrary to what is believed by working people, expenses tend to go up after retirement. There are several reasons for it. When young you are able to do most of daily chores yourself. However an old person with much lower energy levels one has to depend on domestic help. One may also need a driver or have to depend on expensive private transport. Visits to doctors become more frequent and the expenses go up not only on consultation but also on medicines and supplements which more than make up for any reduction in your grocery and food bills.
While working most of us were unable to attend many social engagements like marriage, birth of a child and many of the numerous celebrations that keep taking place in the immediate and extended family. Once retired the calls on you to participate and give your blessings grow frequent and louder. Now, we all know that social commitments also call for a substantial financial commitment. In fact, expenses on social and family events form a huge part of expenditure in your budget.
Thus it can not be gainsaid that seniors also require a much larger standard deduction compared to young working people.
My submission is that it will be reasonable to give seniors a standard deduction of 2 lakhs along with an exemption limit of 8 lakhs. Also these limits should be linked to inflation and get automatically revised.
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