Tax Saving Tips For Senior Citizen: Senior citizens above 75 years of age are exempted from filing ITR only if they have income from salary interest, but they will have to invest to save tax if they have more income.
Tax Saving Tips
Tax Saving Tips: Those senior citizens who have high income and want to invest to save tax, they are always looking for such means of investment where they get excellent returns on investment and also the investment period is not long.
There is a lock-in period of 3 years on investment in ELSS scheme of mutual funds. Investment in tax saving fixed deposit scheme has to be made for 5 years. Investment in the Senior Citizen Savings Scheme of the Post Office is locked for 5 years. Investment has to be made in National Savings Certificate ie NACC also for 5 years. Investment in tax free bonds gets locked in for 5 years. Whereas in PPF one has to invest for 15 years.
In such a situation, let us tell you where senior citizens can invest to save tax. Also, where will be the minimum lock-in period and where can one get the maximum return on investment.
1. Senior Citizen Saving Scheme (SCSS) – The Central Government’s Senior Citizen Saving Scheme is the best way of investment for the elderly where they can save tax along with getting better returns on investment. From January 1, 2023, the interest rate on Senior Citizen Savings Scheme has been increased from 7.6 percent to 8 percent. Your investment gets locked for 5 years and after maturity of 5 years you will get your money back. If you want, you can extend the term of investment for 3 more years. Tax exemption can be obtained under 80C. A maximum of Rs 15 lakh can be invested in it. But tax exemption can be obtained under 80C only on an investment of Rs 1.50 lakh.
2. Tax Saving Fixed Deposit – All banks issue tax saving fixed deposit schemes. You can save tax by investing in this scheme by going to your bank. If we look at the interest rates of tax saving FD scheme of different banks, then there is a difference in the interest rates of banks. SBI is giving 7.25 percent interest to senior citizens, while Axis Bank is offering 7.75 percent interest. Investment in tax saving fixed deposit scheme is locked for five years. Annual investment can be made to save tax up to Rs 1.50 lakh in a year.
3. National Savings Certificate (NSC) – Senior citizens can save tax by buying National Savings Certificate as well. Recently, the government has increased the interest rate on National Savings Certificate from 6.8 percent to 7 percent from January 1, 2023. Tax exemption will be available under 80C on investment. Investment in National Savings Certificate will be locked for 5 years.
4. Tax-Free Bonds – Tax-free bonds can prove to be a better investment option for senior citizens. In this, tax can be saved along with getting better return on investment. Tax-free bonds are issued by government companies or institutions, so the returns are also safe. Senior citizens can invest in tax-free bonds with better ratings. One has to invest in bonds for at least 5 years. Along with this, income will continue to be received from this annually. Investments can be made in tax-free bonds of the National Highway Authority ie NHAI.
5. ELSS Scheme – Senior citizens can invest in ELSS scheme of mutual funds if they wish. Investment in this remains locked for only 3 years. Tax exemption can be obtained under 80C on annual investment up to Rs 1.50 lakh. But there is also a risk in investing in ELSS scheme. Mutual fund companies invest the accumulated money in the stock market. In this case, the returns depend on the ups and downs in the stock market. Loss can also happen if there is a big fall in the market.
