Why do Senior Citizens get Bigger Tax Breaks?

Everybody is equal before the law. However, could everyone be equal before the Tax-man? When tax laws were first introduced in our country, everyone was treated the same whether it was income tax or property tax. Over time the government came to realize that senior citizens could not be treated the same as those who earn a salary with a possibility of an increase.

This is because senior citizens are on a fixed income and they have no flexibility to make more money, to change jobs or otherwise better themselves financially. To accommodate this reality, taxes are often adjusted for senior citizens.

Reasons Why the ‘Seniors‘ Enjoy Tax Benefits

In India we have 100 million senior citizens roughly 10% of the total population. Nevertheless we give due care and respect to this vulnerable population. This stems from our rich culture and philosophy of respecting the elderly. This is one major reason why we tax our senior citizens less. However allowing them to keep more of their pensions also helps the government in return.

Public Expenditure is Lowered: Governments spend a lot for the aged through social welfare programs. However if our senior citizens had the financial security, they could look after themselves better without much government support. This could bring down the government expenditure on these social welfare programs. This is one logic behind relaxation of taxes for the aged.

Helps to Lower Burden on Family: Seniors have health issues that can become catastrophic in an instant. A lower tax rate keeps from burdening the senior and his/her family when illness strikes. Reasonable, lower tax rates help the elderly as they face their most difficult years.

Senior Citizens Use Less Government Services: Senior citizens tend to use fewer government services than working people. They drive less, they do not have children in public school, and they certainly commit few crimes. Overall, seniors do not cost the government in the same way that younger people do. Therefore, the government is able to justify a lower rate.

Senior Citizens are a Major Political Force: Seniors, despite modest incomes, have also become a major political force in the country. They are retired with more time on their hands to lobby their local and national government officials for special favors. Senior citizens are more organized under political parties, NGOs, and other groups. This has helped them to become a pressure group.

Younger people with senior relatives also want their elders to be treated fairly.  This demand has also influenced government decisions to lower taxes on senior citizens. This helps adult sons and daughters to keep more of their own money because their parents aren’t losing their money to taxes.

Our senior citizens are those who shaped the destiny of our country when they were young. They have put our country on a growth trajectory and they still guide our generation to attain still more success. Therefore, tax benefits to our elderly are just a small show of gratitude and affection that our government and our nation as a whole could give them for their services.

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