Can Senior Citizens get tax-free income from Fixed Deposit?
Can Senior Citizens get tax-free income from Fixed Deposit?
Is it possible for senior citizens to get fully tax-free income by investing in 5-year Tax saver FD? Theoretically, it may be possible. But it's not so easy practically. Read on to know why.
Is it possible for senior citizens to get fully tax-free income by investing in 5-year Tax saver FD? Theoretically, it may be possible. But it's not so easy practically. Read on to know why.
You know investment up to Rs 1.5 lakh/year in 5-year tax saving FDs qualifies for tax deduction Section 80C.
You know investment up to Rs 1.5 lakh/year in 5-year tax saving FDs qualifies for tax deduction Section 80C.
Section 80C deduction of up to Rs 1.5 lakh is available to senior citizens also.
Section 80C deduction of up to Rs 1.5 lakh is available to senior citizens also.
Further, senior citizens can claim up to Rs 50,000 tax exemption against interest income from FD in a financial year under Section 80TTB.
Further, senior citizens can claim up to Rs 50,000 tax exemption against interest income from FD in a financial year under Section 80TTB.
With the help of benefits under sections 80C and 80TTB, a senior citizen can get fully tax-free income from tax-saving FD if he invests in a way that his total interest income is close to Rs 50,000 in a financial year.
With the help of benefits under sections 80C and 80TTB, a senior citizen can get fully tax-free income from tax-saving FD if he invests in a way that his total interest income is close to Rs 50,000 in a financial year.
In an article, The Economic Times today even shared a detailed calculation to prove how senior citizens can get tax-free return from tax-saving FD. However, it's not practically possible.
In an article, The Economic Times today even shared a detailed calculation to prove how senior citizens can get tax-free return from tax-saving FD. However, it's not practically possible.
Reason: Many senior citizens are dependent on income from FDs, savings account and post office deposits. So restricting annual income from such deposits to Rs 50,000 for tax-free income is not practically possible.
Reason: Many senior citizens are dependent on income from FDs, savings account and post office deposits. So restricting annual income from such deposits to Rs 50,000 for tax-free income is not practically possible.
Further, Section 80TTB limit applies to all sorts of interest income, including all types of bank deposits including savings, FDs, post office deposits, cooperative bank deposits etc.
Further, Section 80TTB limit applies to all sorts of interest income, including all types of bank deposits including savings, FDs, post office deposits, cooperative bank deposits etc.
Well, the best thing to do is invest as per your need or after consulting a SEBI-approved financial advisor. Obsessing about tax-saving only can be fatal for any investor, even senior citizens!
Well, the best thing to do is invest as per your need or after consulting a SEBI-approved financial advisor. Obsessing about tax-saving only can be fatal for any investor, even senior citizens!
What's best thing to do?
What's best thing to do?
You can learn more about personal financial planning at The 1% Club
You can learn more about personal financial planning at The 1% Club