Tax on saving certificates
For most senior citizens, saving to reduce tax liability is hardly a viable option. Nor does it make sense. Ironically, most of them are wholly dependent on the income from the investments they made during their working life in tax saving schemes such as the Employees' Provident Fund and the Public Provident Fund. To suggest a similar method to save and reduce taxes during their retirement is unjust on many other counts as well. The point has repeatedly been made that the present generation of senior citizens has not benefited from macro-economic policies of the recent past. A period of historically low interest rates has certainly enabled many individuals to borrow against future income and buy homes and other assets.
For many senior citizens, however, low interest rates have translated into diminished returns from bank deposits and other safe investment avenues. Most of them had no inkling of a drastic drop in interest rates. In contrast to the younger generation, which will soon be able to invest in market-based pension schemes, they have had no opportunity to hedge their risks. There is an iron-clad case for giving preferential treatment to senior citizens and those about to retire. Senior citizens feeling disturbed by the proposed taxes. Enhancing investment limits for benefits is no consolation, for the old have neither the money nor the need to save. In fact, pensioners would be happy if their income from pension is declared tax-free.
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