What Are The Best Tax Saving Schemes For Senior Citizens In India
Investment is one most important factor in financial planning at every age. There are many benefits of starting investment at an early age. There are various investment plans that are designed for the needs of different customers. As every investor has a different need than the other one, some investors prefer risky equity funds that reap good returns, whereas other prefer bonds that ensure steady return. One must assess his/her needs, preference and then decide the type of investment.
Talking about needs, you must take in account that your financial needs changes as a human change with changing age. And so, age plays a vital role in deciding which investment instrument should you choose. Somebody who is in his 30’s can choose to invest in high-risk investment instruments whereas somebody who is appearing the age of 60’s and planning for retirement must go for low-risk investment instrument that will give steady returns to fulfil the void of monthly income.
Here are some of the investment plans for senior citizens that will bring profit and save tax. Let’s have look at the list of such tax saving schemes for senior citizens.
- Fixed deposits and Recurring deposits
Fixed deposits or FDs and Recurring deposits that is RDs are the first recommendations that you will receive from people around you for retirement savings. And why not after all they offer highest rate of interest for senior citizens compared to other investment options. Also, under section 80TTB of the Indian Income Tax Act, the interest income of up to ₹50,000 is tax exempted. These options help you to gather funds in long-term and get good returns on investment.
- National Pension Scheme
Offered by the Government of India, this scheme is safe and profitable scheme introduced with the purpose of providing a financially secured life after retirement. The National Pension Scheme is available for any Indian citizen between 18 years to 65 years of age. This scheme is regulated by the Pension Fund Regulatory and Development Authority of India (PFRDA).
- Senior Citizen Savings Scheme
The Senior Citizen Savings Scheme or SCSS is a scheme designed to offer a financially secured after-retirement life. It is the best tax saving schemes option that reaps good return on investment in long-term investment and get additional benefits. Apart from being lucrative, it offers tax saving benefits under Section 80C 0f the Income Tax Act. The SCSS scheme can be availed from any post-office near you.
- Pradhan Mantri Vaya Vandana Yojana
The Pradhan Mantri Vaya Vandana Yojana is introduced by Life Insurance Corporation of India that is LIC. It is a low-risk investment scheme that is introduced to offer a steady and guaranteed return on investment to the retired individuals. This scheme comes with the term of 10 years and fixed rate of interest of 8% p.a.
- Mutual funds
If you want to build a lucrative corpus for your post-retirement life and you have a high-risk appetite, then mutual funds make a great tax saving schemes option. This option will help you create a strong corpus and be ready for future inflation. Investors with high-risk appetite can opt for equity funds whereas investors with low-risk appetite can opt for debt funds.