Tax planning on 40s & 50s
ЁЯФ╕Tax Planning in your 40s and 50s
▪️ This may be the time when your household responsibilities may considerably increase with added expenses involving your children like higher education, marriage, and so on.
▪️ You or your spouse may even have some health expenses.
▪️ At this stage, most individuals do not wish to invest in instruments that are riskier.
▪️ Also, your retirement is right around the corner, and it is important to think seriously about how you want to ensure an income post-retirement.
ЁЯФ╕Here are some of the Tax Saving Instruments you should consider in your 40s and 5os⤵️
ЁЯФ╣Child’s Education Loan
▪️ If you take up a loan for your child’s higher education, you can get a deduction under section 80E of The IT Act.
▪️ Interest amount paid during the financial year is allowable as a deduction from taxable income.
▪️ No Limit on the deduction amount.
▪️ Benefit of the deduction is available for a maximum of 8 years or till the interest is paid- whichever is earlier.
▪️ Applicable even when you have taken an education loan for your spouse, or children or if you're just a legal guardian.
ЁЯФ╣Tax Saving Fixed Deposit
▪️ As we transition into our 50s, our appetite for riskier investments decreases.
▪️ A Tax Saving FD is one of the safest investment options out there, with extensive Tax Benefits.
▪️ Tax Saving Fds can offer up to 6.5% annual returns with an additional 0.50% hike in interest rates to senior citizens.
▪️The Investment is eligible for a deduction, up to Rs. 150,000 under section 80C of the Income Tax Act.
ЁЯФ╣Home Loan
▪️ Since home loans are long-term debt, you can continue to claim a deduction on repayment of the principal amount under section 80C of the Income Tax Act.
▪️ The limit for deduction under section 80C of is up to ₹ 1,50,000.
▪️ You can also claim a deduction on Interest Paid for a home loan, in a financial year under Section 24 of the Income Tax Act.
▪️️ An additional deduction of Rs. 50,000 for interest payable on the home loan is available under Section 80EE.
ЁЯФ╣National Pension Scheme (NPS)
▪️ At this stage, your retirement is right around the corner, and planning for it is more important than ever.
▪️ In this phase, you can consider increasing your contributions to the National Pension Scheme (NPS) or other pension accounts.
▪️Any Individual who is a Subscriber of NPS can claim Tax Benefits under Sec 80 CCD(1) within the overall ceiling of ₹ 1.5 Lac
▪️An additional deduction for investment up to ₹50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B)
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