A person above the age of 60 years is considered to be a senior citizen. As most people involved in doing a fixed salary job for all their life are due for retirement at this age, there can be a great financial constraint that may arise upon them. Irrespective of whether you were a government employee, now benefiting from your pension, or an employee with a private firm, having secured savings for the post retirement years. Everyone looks forward to saving on a considerable amount of money in order to make more room for their personal expenses.
In order to understand how one can use their age as an advantage and save on the taxes, we give you some vital information. But before that, it is also very important to know that if you fall in the bracket of 60 to 80 years of age; only then you are considered as a senior citizen only. However, if you are above 80 years of age, then the taxation rules are different
- Basic Limit: Under the Basic Limit for computing Taxes to be paid by a senior citizen, every senior citizen enjoys a freedom of up to Rs. 3,00,000 every year. Any income within this limit shall be considered as tax free. For very senior citizens, this goes up to Rs. 5,00,000.
- Gifts and Investments: When senior citizens want to gift something to someone or want to invest their money in to some kind of insurance policies or plans such as iIncome, then the same is exempted from taxation.
- Investments in PPF: Another useful commodity to help senior citizens in their tax saving endeavours is the Public Provident Fund. It allows an exemption of upto Rs. 1,50,000 for the senior citizens of India.
- Investment in Health Policies: Under Section 80 D, senior citizens are eligible for exemption of up to Rs. 20,000.
- Post Office Savings: It is the best tax saving scheme for senior citizen’s tax saving planning. Section 80 L allows tax free interests up to Rs. 12,000 per annum in such respect.
For more details on tax saving, log on to the Aegon Life website. The resources here will certainly give an in depth analysis in to the world of saving taxes.