Union Finance Minister Nirmala Sitharaman is set to present the comprehensive annual budget for the financial year 2024-25 in Parliament later this month. Taxpayers are hoping for incentives, especially for senior citizens over 60 who are required to pay taxes on their income.
Given the current rising cost of living and other expenses, there is an increasing need to enhance the existing income tax benefits. There are demands for exemptions from the Union Budget 2024-25, particularly concerning Section 80D, which provides tax deductions for health insurance premium payments and medical expenses.
Currently, individuals below 60 years of age can claim a maximum tax deduction of Rs. 25,000 under Section 80D, while senior citizens have a limit of Rs. 50,000. Additionally, an extra Rs. 5,000 can be claimed for preventive health check-ups. Considering the substantial increase in medical expenses over the last five years, many are pushing for an increase in the Section 80D limit. It is anticipated that the government may announce changes in this regard in the upcoming budget.
The demand to increase the Section 80D limit is not new. In the 2018 budget, the limit was raised from Rs. 30,000 to Rs. 50,000, but it has remained unchanged since then. With the significant rise in hospital bills, it was expected that the interim budget presented on February 1 might address this issue, but no decision was taken.
However, experts believe that there is a possibility of an announcement in the full budget. It is suggested that the government is considering increasing the health insurance tax exemption limit for senior citizens from Rs. 50,000 to Rs. 1 lakh.
Currently, acquiring health insurance with coverage of Rs. 10 lakh for two individuals above 60 years old in the family costs more than Rs. 69,000 in premiums. There are calls to raise the health insurance premium exemption limit to Rs. 1 lakh. It appears that the central government is also inclined towards this change. We will have to wait and see what decision Finance Minister Nirmala Sitharaman will make in the upcoming budget.
