Thursday, May 12, 2011




(as of May 2011)

Part 3 Financial Benefits

7. Financial Benefits: a) Income tax rebate up to an income of Rs. 2.5 lakh p.a. from 1-4-11 and this concession shall be available to all senior citizens of 60 years & above, as against 65 at present. A special category of very senior citizens of those above 80 will be given exemption limit of Rs 5 lakh per annum. Under Indira Gandhi National Old Age Pension, the eligibility is being reduced to 60 from 65 and those above 80, will be given pension (Central Govt Contribution) of Rs 500 against Rs 200. Interest on daily basis is calculated for Savings Bank Account & rate of interest in Savings Bank is increased. b) Separate wards are provided for filing Returns for Senior Citizens. All claims of Senior Citizens are settled on the spot. If not, refund is required to be given within 3 months of filing the Return. c) Deduction of Medical Insurance premium is increased to Rs.20000. Medical expenditure for some specific diseases is exempted up to Rs.60000. d) The present limit of TDS is increased to Rs.10000 from Rs.5000 from 1-4-07. e) State of Maharashtra exempts Senior Citizens from Professional Tax. f) Senior Citizens are given .25 to 1% more interest by banks on deposits. g) Senior Citizens Scheme: Senior Citizens of 60 and above can deposit Rs. 1000 to Rs. 15 lakh (30 lakh for husband & wife) at the fixed interest rate of 9% in any Post Office or Bank for a period of 5 years, extendable for 3 more years. This can be in joint account or separate account of individual. This account can be closed after 1 year. Income from this account is taxable. h) Reverse Mortgage Scheme: Senior Citizens of 60 and above having their own houses can mortgage their house and get a monthly amount without payment of tax either on cash received from Mortgager or capital gain tax on excess valuation of the flat for day to day expenses and also for health care, home improvements, recreational, religious purposes etc under this scheme without vacating their house subject, of course to valuation of the house, age, interest rates etc. When one dies or house is sold, the debt gets paid off. Spouse can continue to stay till survival. Those in need of monthly money for maintenance can take decision after studying the offer in detail. Now, Central Bank of India & Star Union Dai-ichi Life Insurance Co. Ltd. have launched an Annuity Product called Cent Swabhiman Plus on 10-12-09, a Reverse Mortgage Loan Annuity (RMLA) - a unique & tailor-made product facilitating Senior Citizens to avail regular payments throughout life till both die, as against 15/20 years by other Schemes and that too with substantially higher payments than other Schemes. Rate of interest charged is 9.5 (to be reset every 2 years) in place of 10.25 to 12% in other Schemes. 60 to 75% of property value (to be revalued every 3 years) is considered for giving annuity, which can be taken at 25% as lump sum and remaining or full amount in monthly, quarterly, annually etc, as desired by borrower. The borrower should be of 60 & above and spouse 55 & above. Payment will be made by Insurance Company & not Central Bank. Keeping in view 2 schemes of repurchase of the mortgaged property by heirs, monthly payment per lakh works out to Rs. 396 or Rs 288 p.m. On death of the borrower, little higher payment is made to the surviving spouse. Payments made under this Annuity Scheme are taxable. Many other Banks have also introduced similar schemes.

18. Medical Facilities: Maharashtra Government has directed all Government & Municipal Hospitals and Hospitals attached to Medical & Dental Colleges to provide free investigations & complete treatment to all Senior Citizens. Investigations include all laboratory investigations, X Rays, CT Scan, ECG. Minor & major operations, ICU etc are also included. There will be separate ques for Senior Citizens for case paper, consultations with doctors & medicines. Except, 3 major Hospitals-Nair, KEM & Sion, all Municipal Hospitals have confirmed in writing that they are giving free treatment to all senior Citizens.

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