Retirement is surely a time to relax after many years of hard work. One of the most crucial concerns of many retirees is how to utilize accumulated retirement corpus in a best way to keep tax liability at bay.
In case you are a senior citizen seeking out for the best tax-saving tips, you should go through all the following four options.
Invest In Senior Citizen’s Saving Scheme
The Senior Citizen’s Saving Scheme is a very demanding investment technique among the individuals who are above 60 years of age. It offers a regular income to the senior citizens. You can invest in this scheme by opening a joint or an individual account with your spouse at a post office or a scheduled commercial bank. SCSS delivers more post-tax returns in comparison to fixed-income taxable instruments. The maximum amount that you can invest in SCSS is INR 15 lakhs for approx 5 years. It may extend further by three more years. Senior citizens who want such type of option to save tax can opt financial instruments as it delivers tax benefits under section 80C of the Income Tax Act, 1961.
Invest In Health Insurance
A health insurance policy delivers the much required financial security against hospitalization cost. Investing in health insurance is a policy that offers tax benefits on the premium paid under section 80D. The non-retirees are permitted a deduction of INR 20,000, senior citizens can enjoy an increased limit of up to INR 30,000. When you purchase senior citizen medical plan, you get tons of advantages. One of the most crucial benefit includes tax saving. The premium you pay for INR 50,000 is tax deductible.
Avail Benefits Under The Income Tax Slab Rates
Senior citizens will be happy to know that the income tax rate for them is less than non-senior citizens. As compared to the tax-free slab of INR 2.5 lakhs for systematic taxpayers, senior citizens get a slab of INR 3 lakhs, while super senior citizens are free from tax up to INR 5 lakhs. Whereas non-retirees pay 5% tax on a taxable amount of INR 2.5 to 5 Lakhs, senior citizens get a high limit of 3 to 5 lakhs.
Invest In Five-Year Fixed Deposits (FDs)
Five-year FDs delivers double benefits of tax saving and wealth creation. In case you are a senior citizen, you can go for such an FD and get higher interest rate. Senior citizens might enjoy up to 50 basis points on investment vehicle. It is spared from total income based on Section 80 C of the Income Tax Act.
Additionally, for saving money in a different way and to stay covered completely, you should buy a health insurance policy from a reliable medical insurance provider.
Keep these tax-saving tips in mind in order to neglect some unwanted burden during your sunset years. By following these tips you can enjoy a good financial freedom and can reduce your tax liability very conveniently.