As a senior citizen with an annual pension of INR 5.20 L and no savings, how much income tax should I pay this year?

Ans: Pensioner earning income upto Rs.7,50,000 will get 2 benefit as per Budget 2023 proposals. Rebate is available for 100% of tax amount and Rs.50000 standard deduction against pension income. Thus, new tax regime will be beneficial for NIL tax liability.

Ans: Person having taxable income of 11 lakhs can opt for new tax regime and pay tax of Rs.75000 plus cess as per budget proposed for FY 2023-24

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: Your income for the year 2025-26 seems to be as under :
Pension - Rs.6,25,000.00.
Interest FDRs (Estimated @ 8%) - Rs.2,64,000.00.
Income from MFs - Nil
TOTAL Rs.8,89,000.00.
Since you are not selling your MFs, so no Income would be there from MFs.
If we file your ITR under New Tax Regime, there will not be any tax payable, as it will be covered under Tax Rebate (u/s 87-A).
Most welcome for any further clarifications. Thanks.