Make healthcare cheaper

Director, Wonderland Consultants and tax and investment advisor, Sandeep Shanbhag tells you what to do and what not to do before the budget. Our experts also tell you what senior citizens can expect or wish for from this budget.

Name: Narendra Kumar

Age: 66

Income: Pension Rs 123,600 per annum and Rs 60,000 per annum from other source of income.

Taxable amount: Nil

Investments: Rs 10,000 per annum in mutual funds

Debts: None

What Narendra Kumar should do now to plan his money better
Sandeep Shanbhag advises:

As Kumar has no taxable income, it would be ideal to invest amount in the bank fixed deposits for a maximum rate of interest. For Narendra Kumar, the entire money invested in fixed deposits (FD) will be tax-free and this is one opportunity Kumar shouldn't let go.

What does Narendra expect from the budget?
Insurance, particularly health insurance should be made cheaper for us. We should also get free or affordable health care.

What experts expect from the budget for Narendra

Tax expert Subhash Lakhotia says...

The pension contribution made by the assessee and which had enjoyed tax deduction under Section 80CCC as per the present law becomes taxable as and when the taxpayer receives the pension amount. We request the Finance Minister to exempt the pension amount from the purview of tax especially because this pension is not received from the employer, but it is in respect of the money for which the contribution has been made by the assessee himself.

 

Financial advisor Sanjay Matai says...

The Finance Minister (FM) had indicated that he might introduce wide-ranging tax reforms. In fact, the entire Income Tax Act could undergo some significant changes. While this was expected earlier, it is possible that some reforms may happen in this budget.

With the removal of Section 80L, all interest incomes have become taxable, ie, tax is applicable even if it were just Re 1 interest earned on the money lying in one's savings account. This has become more of an administrative hassle for millions of taxpayers rather than any additional revenue source for the Government.

 

Therefore, the FM should reintroduce Section 80L. Even a small limit of say Rs 5,000 would be very useful in cutting down the paperwork substantially. The loss would be minimal.

Tax rate status as of now

Income slab	Tax rate
Up to Rs 1.90 lakh	Nil
Rs 1.95 lakh to Rs 2.50 lakh	20%
Above Rs 2.50 lakh	30%