Senior citizens will need to pay tax on their interest income only if it crosses Rs50,000 in a financial year, according to the Union budget unveiled on Thursday. The current threshold is Rs10,000.
Fixed deposits with banks and post offices, as well as recurring deposits are among the preferred investment instruments for many senior citizens, classified as individuals above 60.
What’s more, the budget has also ended the current practice of tax deduction at source (TDS) on interest income earned by senior citizens. Currently, TDS is deducted on deposits at the rate of 10%. In cases where tax liability is more than the TDS, the account holder will have to pay the difference.
