The Hindu Business Line : Senior citizen issues not addressed by draft Tax Code

Coimbatore, Aug. 17 While the draft Direct Taxes Code promises to bring about sweeping changes in personal income-tax rules, it seems to have ignored some of the concerns of senior citizens. .

A key issue for senior citizens is the definition of a senior citizen and the relaxation of rules vis-À-vis Tax Deducted at Source (TDS) on deposits placed by them.

In the context of the break-up of the joint family system, another issue is why investment in retirement homes should not qualify for tax concession, just as a home loan.

Age discrepancy

Dr Sheilu Sreenivasan, Founder President, Dignity Foundation, Mumbai, which has been fighting for the cause of senior citizens, in an e-mailed interview to Business Line, said the foundation had appealed to the Finance Minister to exempt rentals or fees paid to old-age homes.

She said that old age/retirement homes should be considered as admissible investment to qualify for capital gains exemptions.

On the anomaly of retaining the age of a senior citizen at 65 whereas the retirement age is generally accepted as 60 and banks and the Railways also accept this age for concessions, Dr Sreenivasan said: “This is the anomaly that has been existing for a long time. The Ministry of Social Justice and Empowerment has fixed 60 years, while the Finance Ministry has fixed it at 65.”

“This discrepancy causes a lot of inconvenience”. When there is a couple where one is 60 and the other 65, the varying treatment is “crudely discriminatory”.

The other major problem confronting seniors is the TDS rule. The draft code prescribes a Rs 10,000 as the limit for tax exemption for interest on time deposits with banks, cooperative banks or housing finance companies.

Dr Sreenivasan said this TDS provision should be scrapped because of the higher tax exemption given to seniors

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