Govt may lower age bar for tax sops to seniors

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Senior citizens can breathe easy now.

The finance ministry is likely to reduce the bar for senior citizens for claiming Section 88B benefits to 60 years from 65 years now.

The benefit allows senior citizens to claim 100 per cent deduction on the tax payable, or Rs 20,000, whichever is less.

This is part of the United Progressive Alliance government's efforts to make life easier for the retired class. According to finance ministry sources, the government was also trying to bring about uniformity in defining 'senior citizens', while extending different kinds of sops to them.

An official pointed out that while the retirement age in the government was 60 years and varied from company-to-company in case of the private sector, the Life Insurance Corporation's Varishta Bima Yojana offering 9 per cent annual returns, was available for those aged 55 years and above.

The eligibility criteria for the Dada-Dadi bonds proposed by former finance minister Jaswant Singh was, however, set at 60 years.

The launch of the bonds is pending with the Rakesh Mohan committee on small savings having submitted its report to Finance Minister P Chidambaram only a week back. The committee was asked to suggest benchmark rates for the Dada-Dadi bonds too.

In the railways, senior citizens who are over 60 years, are eligible for 33 per cent discount on fares.

Such disparity in age limits, while defining senior citizens, makes it difficult for the government in justifying the sops.

"It is difficult to estimate the loss to the exchequer since in the present disclosure system, the age profile of the tax assessee is not available," said a revenue department source.