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Balwant Jain

Tax and Investment Expert ,

How pension received is taxed

 

Questions Answered

Q

santosh.jamble: Hello Sir, My 80C bracket is reached to 1.5 lakh. Also i inveted 40K in mediclaim ( 80D). Home loan is there but it come to end in DEC-20. Is there any other options to save tax?? (Other than NPS)

Balwant Jain: There are three major avenues for tax benefits. The first one under Section 80 C is already exhausted. Secondly You have also paid the premium for mediclaim of Rs. 40,000/-. Deduction under Section 80 D can be claimed for your family for Rs. 25,000/- and equal amount for your parents. In case you or your parents happen to be senior citizen the deduction available goes to Rs. 50,000/- in each case. Evaluate whehter you are availing the benefits fully. and thirdly NPS. It seems you do not want to put money in NPS which entitles you to an exclusive deduction of Rs. 50,000/- for contribution made by you in your NPS account under Section 80CCD(1B) The home loan benefit is also being availed. So in my opinion there is no benefit left which you are not claiming unless you get your salary composition reworked to get various tax free elements included in your CTC. You can also get superannuation contribution from your employer up to Rs. 1.50 lakh as tax free. You can also make your employer contribute towards your NPS account up to 10% of your salary and claim the benefits outside the limit of Rs. 1.50 lakhs. However there is restriction of Rs. 6.50 lakhs
Q

guest: Sir, I am a pensioner. Beside pension income, I have interest income from Fixed deposits under normal and SCSS. I have also a Housing Loan where my repayment comes to 1,80,000 per annum. Intt per annum comes to around 1 lakh. I have also taken commuted value of the pension for which an amount of Rs.9105/- is being deducted every month from my gross pension. I have also paid Medical Insurance of Rs.19520/-(premium) for this year. I am now 62. Kindly suggest ways to save tax. Lalmohan Patnaik

Balwant Jain: Against your interest on fixed deposit with banks/post office saving bank interest including SCSS you can claim deduction up to Rs. 50,000/ every year. Moreover you can also claim standard deduction up to Rs. 50,000 every year against your pension income. If after deduction of these amount as well as for home loan, you can claim deduction under Section 80 C by investing in tax saving fixed deposits with banks or post office or by buying national saving certificates. In case the limit of Rs. 15 lakhs for SCSS is not fully exhausted, you can deposit money in senior citizen scheme and claim the deduction under Section 80 C for such deposits up to Rs. 1.50 lakhs every year.
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