Sir, Good Afternoon. I am taking Voluntary Retirement on Jan2026 from Central Govt Service. I will get a monthly pension of Rs.50000. I will invest Rs.30 Lakh in SCSS scheme for getting monthly Rs.20500/-. I will also invest Rs.9 Lakh in POMIS for getting Rs.5250 monthly. I will also get Rs.8000/- as rent.These all adding my total income after retirement will be 83750. Sir my question is whether I have to pay income tax on this income. If i have to pay please advise how to save the tax.

Ans: Considering that you have retired and you're receiving income from POMIS, FD interest, and dividends, it's important to assess whether the total of these incomes exceeds the basic exemption limit for income tax. the basic exemption limit for individuals below the age of 60 was Rs. 2.5 lakh per financial year.

If the total of your interest income and dividend income exceeds the basic exemption limit, you may be required to file an income tax return. Even though you don't have active salary income, your other sources of income could still make you liable to pay tax.

Ans: Firstly, let me express my gratitude for your service to the nation as a retired Air Force veteran. Your dedication and sacrifice are truly commendable.

Evaluating Your Tax Liability
Pension Income and PPF Subscription
Your annual pension of 8 lakhs for FY 2023-24 is a significant source of income, subject to taxation.
The PPF subscription of 1.5 lakhs qualifies for deduction under Section 80C, reducing your taxable income.
Mutual Fund SIP and Other Sources of Income
The annual mutual fund SIP of 1.56 lakhs contributes to your investment portfolio but does not offer tax benefits.
Income from other sources, including the maturity of KVP and TDS, adds to your total taxable income.
Rent Payment and TDS
Paying home rent from your pension reduces your taxable income but does not qualify for tax deductions.
TDS from your pension and advanced tax payments are essential for compliance but may increase your tax liability.
Estimating Additional Tax Liability
Calculating Taxable Income
Deducting allowable exemptions and deductions from your total income will determine your taxable income.
Your tax liability will depend on the applicable tax slab rates for FY 2023-24.
Considering Tax Deductions
Exploring additional tax-saving avenues like Senior Citizen Savings Scheme (SCSS), Tax-saving Fixed Deposits (FDs), or National Pension System (NPS) contributions can help reduce your tax liability.
Tax-Saving Strategies
Leveraging Senior Citizen Benefits
As a senior citizen, you may benefit from higher tax exemption limits and additional tax-saving opportunities.
Senior Citizen Savings Scheme (SCSS) and Pradhan Mantri Vaya Vandana Yojana (PMVVY) offer attractive interest rates and tax benefits.
Maximizing Section 80C Deductions
Utilize the full potential of Section 80C deductions by exploring eligible investments such as Tax-saving FDs, SCSS, and Equity Linked Savings Schemes (ELSS).
Assessing Health Insurance Benefits
While you mentioned no health insurance currently, consider investing in health insurance plans to avail tax benefits under Section 80D.
Conclusion
In summary, optimizing your tax planning strategy requires careful consideration of available deductions and investments aligned with your financial goals. By exploring tax-saving avenues like SCSS, Tax-saving FDs, and health insurance, you can effectively reduce your tax liability while securing your financial future.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: It's not possible to work out your tax liability on the basis of incomplete information, about your tax & tax saving instruments.
Tax liability will depend upon your total income from all other sources, Tax saving investments & your age etc.
Most welcome for any other clarifications. Thanks.

Ans: Hi Sir,

You can choose the new tax regime from next year and pay comparatively less taxes. Doing investments to save tax is not a good idea.
As per your income discussed, tax will have to be paid and there is no way to save that.
You can pay income tax using net banking or upi or card while filing your ITR.
Donating u/s 80G under new tax regime is not applicable.

For you, choosing new regime is better as it will have less tax for you to pay. You will have to pay 1.4 lakhs less tax in new tax regime for FY 2025-26. Total tax paybale - 97500

Best Regards,
Reetika Sharma, Certified Financial Planner
https://www.instagram.com/cfpreetika/

Ans: A pension received after retirement is eligible for a standard deduction of ?75,000 under the new tax regime, as it is treated as "Income from Salaries". If opting for the old tax regime, the deduction is ?50,000.