Budget 2024: Top 10 Expectations for Retirement Planning from FM Nirmala Sitharaman

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As Budget 2024 approaches, expectations are high for significant reforms in retirement planning. Experts suggest innovative measures such as a ‘Retirement Savings Credit’ for low-income individuals, increasing the NPS withdrawal limit to 80%, and introducing inflation-indexed bonds for retirees. This article delves into these expectations and their potential impact on India’s retirement landscape.

Raise Deduction Limit Under Section 80C

Current Deduction Limit

Currently, the tax deduction limit under Section 80C stands at ₹1.5 lakh.

Proposed Increase

Ashish Aggarwal, Director at Acube Ventures, recommends increasing the limit to ₹2.5 lakh, with an additional ₹1 lakh sub-limit specifically for retirement-focused instruments such as NPS and ELSS.

Impact on Retirement Savings

Increasing the deduction limit would significantly bolster retirement savings by allowing individuals to save more while enjoying tax benefits.

Expert Opinion

A higher deduction limit under Section 80C can incentivize more individuals to invest in long-term retirement products,” says Aggarwal.

Senior Citizens Savings Boost Scheme

Proposal Overview

Aggarwal also proposes a ‘Senior Citizens Savings Boost Scheme,’ offering an additional 1% interest rate on all fixed deposits for those over 60.

Benefits for Seniors

This scheme would provide a much-needed financial cushion for senior citizens, ensuring better returns on their savings.

Long-term Impact

The additional interest could encourage more seniors to save, improving their financial stability in retirement.

Youth Retirement Benefit

Target Demographic

This proposal targets millennials, encouraging early retirement planning.

Proposed Benefit

Aggarwal states that more people may invest in long-term retirement goods if the Section 80C deduction cap were raised.

Encouraging Early Planning

Early investment in retirement planning can lead to a larger retirement corpus due to the power of compounding.

Expert Insight

“Encouraging the youth to start retirement planning early can lead to more financially secure retirements,” notes Aggarwal.

Retirement Savings Credit

Inspired by US Model

Associate Director at Fincorpit Consulting Gaurav Singh Parmar recommends introducing a “Retirement Savings Credit,” which is modeled after the US system.

Proposed Tax Credit

This credit could provide up to ₹10,000 as a tax credit for low-income individuals contributing towards retirement accounts.

Enhancing Inclusivity

This measure aims to make retirement planning more accessible to low-income individuals.

Expert Opinion

“A Retirement Savings Credit can provide much-needed support to low-income earners, helping them save for retirement,” says Parmar.

NPS Withdrawal Limit

Current Withdrawal Limit

Currently, the tax-free withdrawal limit for NPS at maturity is 60%.

Proposed Increase

Parmar proposes increasing this limit to 80%, making NPS more attractive to investors.

Benefits for Investors

A higher withdrawal limit would provide greater financial flexibility and security for retirees.

Expert Insight

“Increasing the NPS withdrawal limit can make it a more appealing retirement savings option,” notes Parmar.

Inflation-Indexed Bonds for Retirement Savings

Introduction of Bonds

Parmar recommends introducing inflation-indexed bonds for retirement savings.


These bonds offer returns benchmarked against consumer price indices, providing stability and growth potential for retirees.

Long-term Impact

Such bonds can protect retirees’ savings from inflation, ensuring their purchasing power remains intact.

Expert Opinion

According to Parmar, “inflation-indexed bonds can offer retirees a stable and secure investment option.”

Special Benefit for Senior Citizens

Proposal Overview

Parmar suggests introducing Section 80TTB, offering senior citizens tax-free interest income up to ₹1 lakh from retirement-focused savings schemes.

Enhancing Pension Coverage

This measure could potentially increase pension coverage in India, providing more financial security to seniors.

Expert Insight

“Providing tax-free interest income can encourage more seniors to invest in retirement savings schemes,” notes Parmar.

Universal Retirement Account

Proposal Overview

Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited, proposes creating a ‘Universal Retirement Account.’

Unified Tax Deduction Limit

This account would have a unified tax deduction limit of ₹3 lakh, making retirement planning more accessible.

Impact on Retirement Corpus

Maurya believes this could increase the average retirement corpus from ₹7.4 lakh to ₹15 lakh in a decade.

Expert Opinion

“A Universal Retirement Account can simplify retirement planning and significantly increase retirement savings,” says Maurya.

Tax Benefits for Women Investors

Addressing Gender Disparities

Maurya proposes looking at further tax advantages for female retirement product investors.

Encouraging Female Participation

These benefits aim to address gender disparities in pension savings, encouraging more women to invest in retirement planning.

Expert Insight

“Providing tax benefits to women investors can help bridge the gender gap in retirement savings,” notes Maurya.

Retirement Savings Match Program

Proposal Overview

Maurya introduces the concept of a ‘Retirement Savings Match Program,’ where the government matches ₹1,000 for every ₹5,000 saved by lower tax bracket individuals in retirement accounts.

Enhancing Savings

This program aims to boost retirement savings among lower-income demographics, providing additional financial support.

Expert Opinion

“For those with lower incomes, a Retirement Savings Match Program can significantly increase their retirement savings,” adds Maurya


The proposed measures for Budget 2024 aim to enhance retirement planning ln India by bringing in creative incentives and expanding retirement savings options for a wider range of individuals. These proposals, if implemented, can significantly improve the financial security of retirees and encourage early and inclusive retirement planning.

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