Budget 2026 wishlist for senior citizens: Higher tax limits, expanded NPS benefits, in-home care

• Seniors seek higher tax exemptions and expanded NPS benefits in Budget 2026
• Calls for comprehensive health scheme for in-home care and assisted living support
• Analysts call for simpler tax rules and higher medical and home-care deductions.

Did our AI summary help?

The senior citizens hope that the Budget 2026 will focus on higher exemption limits on tax. Hopes are also building for possible expansion of National Pension System (NPS) tax benefits for the elderly, and a comprehensive health scheme covering in-home care.

Emphasis on higher exemption limits

Although the Income Tax Act offers several deductions for Indian residents aged 60 and above, the central demand is that the basic exemption limit be raised to ease the tax burden.

Currently, Section 80TTB under the old tax regime allows resident senior citizens (60–80 years) to claim a deduction of up to Rs 50,000 on interest income from savings and fixed deposits.

Other major expectations include higher exemption limits for medical expenses—under Section 80D for health insurance and critical illness, and Section 80DDB for treatment of specified chronic diseases—along with simplified TDS and TCS norms to cut compliance hassles for seniors.

“An upward revision of exemption thresholds, coupled with simplified slab structures, would provide much-needed relief to pensioners and retirees dependent on fixed incomes,” said Kunal Savani, partner, Cyril Amarchand Mangaldas.

Tax analysts say many senior citizens have passive income in the form of capital gains, but such profits earned from capital gains aren’t eligible for a tax rebate under Section 87A.

“Given the current scenario of rebate under section 87A, one can expect the government specifically spell out its allowance to senior citizens to avail the rebate on such capital gains, which provides the much-needed relief to such senior taxpayers,” Savani said.

Expand NPS tax benefits

Hopes are also building for enhanced pension participation through the National Pension System (NPS), which offers significant tax benefits via deductions under Section 80CCD under both old and new tax regimes.

“Extending tax benefits on NPS contributions under the new tax regime to both salaried and self-employed individuals will help encourage long-term, disciplined retirement savings,” PB Fintech's retirement planning arm Pensionbazaar head Vishwajeet Goel said.

PB Fintec joint group CEO Sarbvir Singh said there is an urgent need for sustained, long-term pension savings and retirement preparedness is emerging as a critical pillar of India’s financial ecosystem.

“The Budget 2026 can encourage disciplined retirement savings by extending NPS tax benefits to both salaried and self-employed individuals. Also, delinking employer participation from the employee’s tax benefit will allow voluntary contributions up to the defined threshold,” Sing said.

A comprehensive scheme for in-home care

Optimism is growing that the Budget 2026 will establish a comprehensive scheme of benefits covering in-home care, assisted living support and transitional care facilities for senior citizens.

Analysts argue that the biggest cost pressure seniors face is not hospitalisation but prolonged home-based care such as attendants, nursing, physiotherapy and assisted living support, which runs for years and is almost entirely out-of-pocket.

“Budget 2026 can realistically ease this by recognising certified home-care and long-term care expenses as core health costs with a separate, high-limit tax deduction for seniors and their children, instead of forcing families to absorb these recurring costs without any fiscal relief,” said Raheel Patel, partner, Gandhi Law Associates.