 "Rent TDS relief, easier NSS withdrawals: How Budget 2025 will benefit senior citizens")
Finance Minister Nirmala Sitharaman presented her eighth consecutive Union Budget in Parliament on Saturday (February 1).
From changes to income tax slabs to major initiatives like IITs and medical colleges, she made major announcements for women, farmers, education, and startups.
The Budget 2025 not only focused on youth but also on easing elderly people’s financial woes.
Take a look.
Catch all the live updates here: Union Budget 2025
Doubled TDS on interest income
This is a big one.
Sitharaman has suggested doubling the tax deduction at source (TDS) cap on income interest for senior citizens.
“The limit for tax deduction on interest for senior citizens is being doubled from the present Rs 50,000 to Rs 1 lakh,” she said in the Lower House.
The move will enable retirees to retain a larger portion of their hard-earned money in fixed deposits and other savings plans.
The TDS threshold for others has been raised from the current Rs 40,000 to Rs 50,000.
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Simplified TDS rules
The rationalisation of TDS rates is another significant change.
The annual rental income threshold for TDS has been raised from Rs 2.4 lakh to Rs 6 lakh.
As a result, many elderly people who depend on rental income may be able to avoid TDS deductions, which will make paying their taxes easier.
Sandeep Chilana, Managing Partner, CCLaw, was quoted by India Today, “The increase in the TDS threshold for various payments is a welcome move to ease the compliance burden on smaller businesses and individuals.”
NSS withdrawals
Additionally, withdrawals from NSS accounts made on or after August 2024 will not be subject to taxes, according to the Union Budget.
“A number of senior and very senior citizens have very old National Savings Scheme accounts. As interest is no longer payable on such accounts, I propose to exempt withdrawals made from NSS by individuals on or after August 29, 2024,” she said.
Many senior citizens still have accounts in such initiatives, even though they were discontinued a long time ago.
These accounts will pay no interest beginning October 1, 2024, but seniors will be able to withdraw money without incurring penalties, giving them access to their money without any additional fees or limitations.
Note that this only applies to NSS-87 and NSS-92. The National Savings Certificate (NSC), another widely used savings plan, is unchanged, according to CNBC-TV18.
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A boost to NPS Vatsalya
Treating ordinary National Pension System (NPS) accounts and NPS Vatsalya accounts equally is a significant development in the pension sector.
With this budget plan, NPS Vatsalya, which was created especially for elderly persons to give them a solid retirement corpus, will now enjoy the same tax benefits as standard NPS accounts, subject to overall contribution caps.
Seniors, especially those without pension coverage, ought to benefit from this change, as it will enable them to accumulate retirement savings that will yield consistent income once they retire, so creating a more secure future.
The Atal Vayo Abhyuday Yojana (AVYAY), which offers older citizens welfare, has received a budget of Rs 289.69 crore.
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Other big key takeaways from Union Budget 2025
Sitharaman earlier today announced changes to the income tax slabs in the country.
Under the new system, those earning up to Rs 12 lakh would not be required to pay any income tax, according to Sitharaman. The standard deduction of Rs 75,000 is not included in this. Additionally, she increased the two-year tax return filing maximum to four years. The old tax regime remains unchanged.
A new Fund of Funds Scheme (FFS) with a capital of Rs 10,000 crore was unveiled by the government on Saturday to support the development of aspiring business owners in the nation.
Over the next three years, the government will also help every district hospital create daycare cancer centres, with 200 of these to be built in 2025–2026.
The Centre will establish a National Institute of Food Technology, Entrepreneurship, and Management in Bihar.
“The Institute will provide a strong fillip to food processing activities in the entire eastern region. This will result in, one, enhanced income for the farmers through value addition to their produce, and two, skilling entrepreneurship and employment opportunities for the youth," Sitharaman said.
The 2025 Budget has announced the setting up of five National Centres of Excellence for Skilling and a Centre of Excellence for Artificial Intelligence (AI) for education with an outlay of Rs 500 crore.
Notably, there are two stages to the Budget Session of Parliament: the first began on January 31 and ends on February 13, and the second will start on March 10 and conclude on April 4.
With inputs from agencies
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