4 Tax Saving Tips for Senior Citizen

Retirement is the time when you want to reap the benefits of all the hard work that you have been doing for several years. But making the best use of your retirement corpus while keeping the tax liabilities at a minimum is a skill that doesn’t come naturally to a lot of seniors.But even if you have not been a very astute investor or tax planner, there are many easy ways to help you save taxes. Here are four expert tips to help you begin-

SCSS or Senior Citizen Savings Scheme, as the name suggests, is a fixed income saving scheme exclusively designed for seniors above 60 years. The maximum amount seniors can invest in SCSS is 15 lakhs for a maximum period of 5 years.On maturity, the tenure can be further extended by three years. SCSS investments enjoy tax benefits under Section 80C of the IT Act. But the interest generated from the investment will be taxed as per income tax slab for senior citizen.

5-year FDs or Fixed Deposits offer a dynamic combination of wealth creation and tax-saving. Most banks offer higher interest rates of up to 50 to 75 basis points when a senior citizen opens an FD account.Under Section 80C , seniors can claim a tax deduction of up to Rs. 50,000 in a year on the interest received from FD. Moreover, seniors who are looking for regular income can also opt for monthly, quarterly, or half-yearly interest pay out options when they open an FD account.

With health insurance , you get financial protection against healthcare expenses, which are generally high in senior years, along with tax deduction on the premiums paid.Under Section 80D of the IT Act, senior citizens can claim a tax deduction of up to Rs. 50,000 on the premiums they pay for a health insurance policy.

If you are looking for fixed risk-free returns with tax savings, NSC or National Savings Certificate is also a worthy contender. The minimum investment tenure is five years, and there is no cap on the amount that you can invest in NSC.It is free from TDS deductions, and even the amount you invest is tax-deductible as per Section 80C. But note that you will be required to pay taxes as per your applicable tax slab on the final interest payout.

These are some of the most effective options for senior citizens to save taxes and make their retirement years more prosperous.Consult an investment advisor to know more and select options that best suit your requirements.Ready to make the most of your money? Start your tax planning journey now!

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.