The Vellore Institute of Development Studies (VIDS) has urged the Central government to introduce a bold ‘No Tax Regime’ for all pensioners during the forthcoming Union budget, in order to enable the pensioners to lead a peaceful retired life. It also pleaded for exemption from income tax on all retirement benefits, including lump sum payments and monthly pension.
VIDS Director P. Jegadish Gandhi had made the above representations in a memorandum sent to Union Finance Minister Arun Jaitley. The VIDS also pleaded for the following concessions for senior citizens: raising the basic income tax exemption limit to Rs. five lakh for the salaried class; enhancing the reimbursement limit for exemption for medical reimbursement perquisites to Rs.50,000; raising the investment limit of Rs. one lakh for exemption from income tax under Section 80C, which was fixed in 2006-07 to at least Rs. 3 lakh in order to encourage investment in government savings.
The VIDS further requested that the cap for automatic tax deducted at source (TDS) for interest on bank deposits be raised from the present Rs. 10,000 per annum to at least Rs. 30,000 per annum. This, it pointed out, would result in increase in bank deposits. It also pleaded for raising the automatic TDS for interest on the deposits made with non-banking financial companies from Rs. 5000 per annum to at least Rs. 15,000 per annum as the Reserve Bank of India monitored the NBFCs closely.
Other pleas included exemption from service tax and cess on all bank and post office transactions, and exemption from toll tax for senior citizens.
It also pleaded for settlement of all outstanding points of the Fifth Pay Commission, and nomination of one pensioner as Rajya Sabha Member.
Exemption from income tax on all retirement benefits sought