2022 Budget Expectations for Seniors: SBI Research has suggested that the government should promote savings by increasing the tax exemption for seniors under Section 80TTB to Rs 1 lakh.
Currently, under this section, seniors are exempt from tax on interest income up to Rs 50,000 from various savings accounts including the Seniors Savings Scheme (SCSS), fixed bank deposits, etc. fixed and periodic deposits.
In its latest “Ecowrap” report, SBI Research said: “Below 80 TTB, interest income from deposits of the elderly (savings bank accounts, fixed deposits, deposit accounts) recurring) up to Rs 50,000 are exempt from income tax.
This threshold can be increased to Rs 1,00.000, which will have a tax cost of only Rs 2,000 crore (approximately 7 bps FD).
Previously, the Institute of Certified Public Accountants India (ICAI) has recommended the government include interest income from National Savings Certificates within the scope of Section 80TTB
Medical Savings Accounts
SBI Research also recommends that the government provide a medical savings account to set aside a portion of withholding tax for the Mediclaim policy or consider a system that deducts interest from savings accounts and pays for medicines, he said.
Is interest income from NSC up to Rs 50,000 tax-free under section 80TTB?
“A health savings account that allows customers to take advantage of EMIS by transferring a portion of withholding tax to the Mediclaim policy.
A system for deducting interest from a savings account and paying it to yourself Mediclaim may be considered”, SBI Research recommends.
“The total number of savings bank accounts in India is 130 crore (excluding Jan Dhan accounts which may be covered by Ayushman Bharat).
If we take the average balance of such an amount (Rs 1215) as the sum insured, the account holder can get up to Rs 50,000 as annual insurance, which can even be modified to include medical expenses,” he added.
No GST for health insurance
The Ecowrap report also recommends that the government consider GST exemptions for health insurance products, at least for all retail and health-oriented products.
“At a time when governments are grappling with an epidemic scenario, they could consider making health insurance cheaper,” he said.
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