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Mihir

Mihir Tanna  |998 Answers  |Ask -

Tax Expert - Answered on Jan 28, 2023

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more
Asked by Anonymous - Jan 26, 2023Hindi
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Mihirji, which is the best investment option for senior citizens to park their money without being taxed?

Ans: Best investment options for senior citizens include Senior Citizen Savings Scheme (SCSS), pradhan mantri Yojana, post office schemes, bank FDs but in all cases interest income is taxable. For Interest earned from deposits with banks, post office or co-operative banks, deduction is allowed for a maximum interest income of up to ₹ 50,000.

Equity mutual fund (growth schemes) provides tax relief on maturity proceeds upto Rs 1 lacs if it held for more than 12 months but equity schemes comes with risk exposures as compare to other investment avenues.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Tejas

Tejas Chokshi  | Answer  |Ask -

Tax Expert - Answered on Jul 15, 2023

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Hi Sir. What would be best investment for Senior Citizen less than 75 years age, with good tax savings option. Please suggest.
Ans: When considering investment options for senior citizens under the age of 75 with good tax savings options, there are a few options worth considering:

Senior Citizen Savings Scheme (SCSS): This government-backed scheme is specifically designed for senior citizens and offers attractive interest rates. Investments in SCSS are eligible for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakh per financial year.

Pradhan Mantri Vaya Vandana Yojana (PMVVY): This scheme is offered by Life Insurance Corporation of India (LIC) and provides regular pension income to senior citizens. It offers a higher interest rate than other fixed-income instruments. PMVVY offers tax benefits on the pension received, and the investment amount is eligible for tax deductions under Section 80C.

Tax-saving Fixed Deposits (FDs): Many banks offer tax-saving FDs with a lock-in period of five years. The interest earned is taxable, but the investment amount is eligible for tax deductions under Section 80C.

National Savings Certificates (NSC): NSCs are issued by the Indian government and offer a fixed interest rate. The interest accrued is eligible for tax deductions under Section 80C. However, the interest earned is taxable.

Tax-saving Mutual Funds (ELSS): Equity Linked Saving Schemes (ELSS) are diversified mutual funds that invest primarily in equities. They offer the potential for higher returns over the long term. ELSS investments are eligible for tax deductions under Section 80C, up to a maximum limit of Rs. 1.5 lakh per financial year. However, please note that ELSS investments are subject to market risks.

It is important to consider your risk appetite, financial goals, and investment horizon before making any investment decisions. I would recommend consulting with a financial advisor who can assess your specific circumstances and provide personalized investment advice based on your needs.

..Read more

Ramalingam

Ramalingam Kalirajan  |7837 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Aug 29, 2024

Money
best investment for Senior citizen for high return and safety
Ans: Importance of Balancing Safety and Returns
As a senior citizen, safety and regular income are crucial when choosing investments.

High returns are attractive, but the safety of capital is equally important. Balancing both can be challenging but achievable.

Investments should also provide liquidity. This is necessary to meet unexpected expenses.

It’s vital to select instruments that offer stability, predictable returns, and minimal risk.

Fixed Deposits (FDs) for Stability
Fixed Deposits are one of the safest investment options. Banks and post offices offer these with guaranteed returns.

They provide a fixed interest rate, offering predictable income. This can be especially reassuring for senior citizens.

FDs come with flexible tenures, from a few months to several years. This allows you to align them with your financial needs.

Senior citizen FDs often offer a higher interest rate. This additional return can help in boosting your income.

However, while safe, the returns are moderate. Consider allocating a portion of your funds here for security.

Senior Citizen Savings Scheme (SCSS) for Regular Income
The Senior Citizen Savings Scheme (SCSS) is another safe and government-backed option. It offers a high interest rate, specifically designed for senior citizens.

The scheme has a tenure of five years, with the option to extend it by three years.

Interest is paid quarterly, providing a regular income stream. This can help meet your day-to-day expenses.

The investment limit is Rs. 15 lakh per individual. This limit ensures a significant portion of your savings can earn a stable return.

While SCSS offers safety and regular income, the returns are fixed. Therefore, it's wise to balance it with investments that have growth potential.

Pradhan Mantri Vaya Vandana Yojana (PMVVY) for Guaranteed Pension
The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme for senior citizens, offered by LIC.

This scheme guarantees a fixed return, with options for monthly, quarterly, or annual payouts.

The investment limit is Rs. 15 lakh per senior citizen, similar to SCSS.

The scheme has a tenure of 10 years, providing long-term income stability.

PMVVY is ideal for those looking for guaranteed income with minimal risk. However, the returns are capped, so consider diversifying your investments.

Monthly Income Schemes (MIS) for Steady Income
Monthly Income Schemes (MIS) are another reliable option. These schemes are available through post offices and certain banks.

They offer regular monthly income, ideal for covering recurring expenses.

MIS is government-backed, ensuring the safety of your investment.

The tenure is five years, with the possibility to reinvest upon maturity. This ensures continued income over time.

While safe, the interest rates may not keep pace with inflation. This makes it essential to complement MIS with growth-oriented investments.

Debt Mutual Funds for Conservative Growth
Debt Mutual Funds invest in fixed-income instruments like bonds and government securities. They are less volatile than equity funds.

These funds can offer better returns than traditional savings accounts or FDs. They also provide liquidity, allowing easy access to your money when needed.

Debt funds are ideal for conservative investors seeking steady growth without taking on much risk.

The taxation on debt funds can be more favourable than on fixed deposits. This can lead to better post-tax returns, especially if held for over three years.

However, they carry some interest rate and credit risk. It's important to choose funds with a strong track record and low credit risk.

Balanced Advantage Funds for Limited Equity Exposure
Balanced Advantage Funds are hybrid funds. They invest in both equity and debt, adjusting their allocation based on market conditions.

These funds offer a balance of safety and growth, suitable for senior citizens willing to take a bit more risk for higher returns.

The equity portion can provide growth, while the debt portion offers stability. This makes them a good middle-ground investment.

Balanced Advantage Funds can help combat inflation and preserve purchasing power over time.

It’s essential to monitor these funds regularly. Though they adjust allocation automatically, they are still subject to market risks.

Corporate Fixed Deposits for Higher Returns
Corporate Fixed Deposits offer higher interest rates compared to bank FDs. However, they come with higher risk.

It's crucial to choose corporate FDs from well-rated companies. This reduces the risk of default and ensures your capital is safer.

The interest income is taxable, just like bank FDs. Consider your tax bracket when choosing this option.

These are suitable for those seeking higher returns while accepting moderate risk.

Diversifying across different companies can help manage the risk associated with corporate FDs.

Government Bonds for Long-Term Security
Government Bonds are a secure investment, backed by the government. They offer a fixed interest rate and have long-term tenures.

They provide higher returns than savings accounts, with minimal risk of default.

Bonds with tax-free interest are available, offering attractive post-tax returns.

Government bonds are ideal for senior citizens who prefer long-term, risk-free investments.

However, they may lack liquidity, as they often have long lock-in periods. Consider this when planning your investment strategy.

National Savings Certificate (NSC) for Assured Returns
The National Savings Certificate (NSC) is a government-backed savings bond. It offers a fixed return and comes with a five-year tenure.

NSC is a safe investment option, suitable for conservative investors.

The interest earned is compounded annually but paid out at maturity. This helps in building wealth over time.

NSC investments are eligible for tax deductions under Section 80C. This can be a benefit if you’re looking for tax-saving options.

However, like other fixed-return instruments, the returns may not keep pace with inflation. Balance this with other investments to ensure adequate growth.

Avoiding Risky and Complex Investments
It’s advisable to avoid high-risk investments like stocks, equity-heavy mutual funds, or complex financial products.

Products like ULIPs or annuities often come with high fees and lower returns. They may not be suitable for senior citizens seeking safety and liquidity.

Direct investments in stocks or equity mutual funds can be volatile. These are more suitable for younger investors with a long time horizon.

Instead, focus on investments that offer stability, regular income, and capital preservation.

Benefits of Regular Funds Through MFDs with CFP Credential
Investing in regular funds through a Certified Financial Planner (CFP) ensures professional management and tailored advice.

Regular funds offer the advantage of expert guidance, which is crucial in navigating market fluctuations.

While direct funds might seem cost-effective, the benefits of regular funds managed by a CFP can outweigh the cost difference.

Regular funds also come with regular portfolio reviews, which help in staying aligned with your financial goals.

Building a Balanced Portfolio
A well-balanced portfolio is essential for senior citizens. It should include a mix of fixed income, growth-oriented funds, and safe investments.

Diversify across different asset classes to manage risk. This ensures that even if one investment underperforms, others can compensate.

Regularly review and adjust your portfolio based on your needs, risk appetite, and market conditions.

Consulting with a Certified Financial Planner (CFP) can help you build a portfolio that balances safety, income, and growth.

Final Insights
As a senior citizen, your investment strategy should prioritize safety and regular income, but not at the expense of growth.

A balanced approach, combining FDs, SCSS, debt mutual funds, and low-risk government schemes, can offer both stability and returns.

Avoid overly risky or complex products that may not suit your risk profile or financial goals.

Regularly review your investments and consider professional advice to ensure they continue to meet your needs.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Latest Questions
Ramalingam

Ramalingam Kalirajan  |7837 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2025

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Get me some clearity on HDFC BALANCED ADVANTAGE FUND as from last few days my portfolio is going in negative
Ans: Understanding Balanced Advantage Funds

Balanced Advantage Funds invest in both equity and debt. They adjust their investments based on market conditions. This flexibility helps manage risk and aim for steady returns.

Recent Performance Insights

It's natural to feel concerned when your portfolio shows negative returns. Remember, short-term declines are common in investments. Balanced Advantage Funds aim to reduce risk by adjusting their investments. This strategy helps manage market ups and downs.

Factors Influencing Performance

Several elements can affect your fund's performance:

Market Volatility: Changes in the market can impact returns.

Asset Allocation: The mix of equity and debt plays a role.

Interest Rate Changes: Fluctuations can influence debt investments.

Economic Indicators: Factors like inflation and GDP growth are important.

Evaluating Fund Performance

To assess your fund's performance:

Compare with Benchmarks: See how it measures up against standard indices.

Review Historical Returns: Look at past performance over different periods.

Consider Risk-Adjusted Returns: Evaluate returns in relation to the risk taken.

Staying the Course

It's commendable to stay focused on your long-term goals. Short-term market changes shouldn't deter your investment strategy. Maintaining discipline is key to achieving financial objectives.

Consulting a Certified Financial Planner

For personalized advice, consider consulting a Certified Financial Planner. They can provide guidance tailored to your financial situation.

Final Thoughts

Market fluctuations are a part of investing. Balanced Advantage Funds are designed to manage these ups and downs. Staying informed and patient can help you reach your financial goals.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |7837 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2025

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Hello, my mother is 62 year old pensioner. She has invested funds in government securities and postal schemes. Despite submitting 15H form and filing ITR (as a senior citizen person), her tax is getting deducted. Can you kindly explain why this is happening?
Ans: There are a few possible reasons why TDS (Tax Deducted at Source) is being deducted from your mother's investments, despite submitting Form 15H and filing ITR.

1. Incorrect or Late Submission of Form 15H
Form 15H must be submitted at the start of the financial year to all institutions where she has investments.
If submitted after TDS is deducted, it won’t apply retrospectively to recover the deducted tax.
Ensure the form is submitted separately to each bank, post office, or financial institution.
2. Exceeding the Basic Exemption Limit
For senior citizens (60+ years), income up to Rs. 3 lakhs is tax-free.
If her total taxable income (pension + interest from investments) exceeds Rs. 3 lakhs, TDS will still apply.
Even if TDS is deducted, she can claim a refund while filing her ITR if her total tax liability is zero.
3. Form 15H Validity Rules
Form 15H is only valid if total taxable income is below the exemption limit.
If her total income is more than Rs. 3 lakhs, banks and post offices will ignore Form 15H and deduct TDS.
4. Different TDS Thresholds for Investments
Banks deduct TDS on FD interest if it exceeds Rs. 50,000 per year for senior citizens.
Post Office schemes (like SCSS) deduct TDS if interest crosses Rs. 50,000 per year.
Government securities may also have TDS rules based on the issuing authority.
5. PAN Not Updated with the Bank/Post Office
If PAN is not linked to the investment accounts, higher TDS at 20% is deducted.
Ensure all investments have PAN updated to avoid excess TDS.
6. Errors in Tax Deduction System
Sometimes, banks deduct TDS even if Form 15H is submitted correctly.
In such cases, she can file an ITR and claim a refund from the Income Tax Department.
What to Do Now?
Check total taxable income to confirm if she qualifies for Form 15H.
Verify all Form 15H submissions with banks and post offices.
Ensure PAN is updated in all financial institutions.
If TDS is wrongly deducted, file an ITR and claim a refund.
Would you like help with checking if she is eligible for a refund?

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

...Read more

Ramalingam

Ramalingam Kalirajan  |7837 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2025

Ramalingam

Ramalingam Kalirajan  |7837 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Feb 05, 2025

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My son is a Singapore citizen. He has a flat in his name in Co-op. Hous. Soc. in Navi Mumbai purchased in 2005. He wants to sell it. Will you please suggest ways to repatriate the proceeds with least tax implications?
Ans: Selling property in India as a non-resident involves several steps. It's important to follow these steps to ensure compliance with Indian laws and to minimize tax liabilities. Here's a detailed guide to assist your son:

1. Understanding Capital Gains Tax

Long-Term Capital Gains (LTCG): Since the property was purchased in 2005 and is being sold now, it qualifies as a long-term asset. LTCG is taxed at 20% for non-resident Indians (NRIs).

Indexation Benefit: This benefit adjusts the purchase price for inflation, reducing taxable gains.

2. Tax Deducted at Source (TDS) Obligations

TDS Rate: The buyer must deduct TDS at 20% on LTCG for NRIs. Ensure the buyer complies with this requirement.

3. Repatriation of Sale Proceeds

NRO Account: Deposit the sale proceeds into a Non-Resident Ordinary (NRO) account.

Repatriation Limit: NRIs can repatriate up to USD 1 million per financial year from their NRO account, provided all taxes are paid.

4. Documentation for Repatriation

Tax Clearance: Obtain a certificate from a Chartered Accountant in Form 15CB.

Bank Procedures: Submit Form 15CA to the bank. These forms confirm that taxes have been paid.

5. Tax Exemptions to Reduce Liability

Section 54: Invest LTCG in another residential property in India within specified timelines to claim exemption.

Section 54EC: Invest in specified bonds within six months of sale to avail exemption. The maximum investment limit is Rs 50 lakhs.

6. Currency Exchange Considerations

Exchange Rate: The prevailing exchange rate at the time of repatriation will apply.

Bank Charges: Be aware of potential charges during the transfer process.

7. Professional Consultation

Certified Financial Planner: Consult a Certified Financial Planner to navigate the complexities of taxation and repatriation.

By following these steps, your son can efficiently manage the sale and repatriation process, ensuring compliance and minimizing tax liabilities.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment

...Read more

Anu

Anu Krishna  |1494 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Feb 05, 2025

Asked by Anonymous - Jan 24, 2025Hindi
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Relationship
I have been married for more than 3 weeks. And I don't like my husband. I didn't like him before the marriage and it was very clear to my family tht I didn't like him. But my parents forced me to get married to him and it was my fault tht I couldn't prioritise my feelings. I considered what would happen to them if I called off the engagement. And after being married I have been more than depressed. My parents keeps telling what I should do. I don't let him touch me since I don't like him I asked him for some time and on the 2nd day he made a huge issue in my family telling them that I don't let him touch me. I started to resent him after this. Everyone around me keeps on telling Me that he will go abroad in 2 weeks so I should do whatever a wife does. it's been 3 weeks and continuous arguments. I'm so sad. I'm scared of what would happen if I leave this marriage. I can't stay in my own family because they would treat me so bad. I would have to stay alone. Thinking about the uncertain future and consequences am not able to do anything. Am stuck in this miserable situation.
Ans: Dear Anonymous,
For sure, it's difficult to be physically intimate with someone that you do not fancy and he is being silly in making this public. Rather than winning you over, he's making it a public issue to gain sympathy which his highly immature.
Now, I am going to give you an example that you may not like.
Eg: You have to live in Japan for 2 years and you do not like that cuisine. But eventually you realize that 2 years is a long time and then you actually start enjoying the food by looking at what's nice in it; healthy, light, good on the heart etc.

It's the same here. You may have gotten forced into the marriage. But it's just 3 weeks. Give it time...NO, you do not have to engage in any physical intimacy with him right away; but at least try to get to know him...maybe someday you might start to appreciate his good qualities, yeah? See, if this is possible in the short time that you have...it's just about having an open mind. Marriages are easy to break, think hard on this one.

All the best!
Anu Krishna
Mind Coach|NLP Trainer|Author
Drop in: www.unfear.io
Reach me: Facebook: anukrish07/ AND LinkedIn: anukrishna-joyofserving/

...Read more

Anu

Anu Krishna  |1494 Answers  |Ask -

Relationships Expert, Mind Coach - Answered on Feb 05, 2025

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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