Anshumaan Das | Apr 26, 2024 |
Tax Savings Investment Option for Senior Citizens in April 2024
The Government provides tax-saving investments to both salaried and self-employed individuals in order to save taxes. Individuals also have tax exemptions and deductions to help them save money and reduce tax liability. Section 80C of the Income Tax Act of 1961 is a widely used tax deduction.
For senior citizens who are looking for tax-saving investment options in April 2024, there are various avenues available.
Here are a few of the investment options that are available:
The Senior Citizen Savings Scheme is a scheme backed by the government of India and is specially designed for senior citizens aged 60 years or older. It offers a higher return rate than others, and it also comes with tax benefits under Section 80C of the Income Tax Act, to a limit.
Banks offer Fixed Deposit Schemes that come with a lock-in period of five years or more, which qualify for the tax deductions that come under Section 80C.
Pradhan Mantri Vaya Vandana Yojana is a scheme for senior citizens and is administered by the Life Insurance Corporation of India (LIC). It offers pension payments on a regular basis. The pension is taxable, but the investment amount is qualified for the tax benefits that come under Section 80C.
Equity-Linked Saving Scheme (ELSS) is mutual funds that invest in equities and offer tax benefits under Section 80C. Although these funds carry the risk of market fluctuation, they have the potential to deliver a higher return over a long period of time. It is also advised to consider the risk an individual can take and the time horizon before investing.
A National Savings Scheme is a government-backed scheme where an individual can invest in government savings bonds, which have a lock-in period of five years. It comes with tax benefits under Section 80C. Senior citizens can invest in NSC, which provides a fixed return and also saves taxes.
When investing in any tax-saving instruments, it is necessary to evaluate factors such as liquidity requirements, risk tolerance, and investment goals. It is also advised that consulting with a financial advisor can help in selecting the most beneficial tax-saving investment option based on the circumstances of the individual. Always check the latest tax rules and regulations applicable before and at the time of investing.
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