My wife has an estimated income of Rs. 450000 by way of bank/post office interest.She has no savings this FY ( FY 2022-23) to get the benefit of 80C . She is a senior citizen aged 70 years. Does her income attract income tax ? What investment should she do to avoid tax ? .Dose she eligible for deduction of Bank deposit interest of 50000 under 80TTB ?

Ans: For Income of 8.5 lacs:

Tax Amount
(as per old Tax regime) 83200
Tax Amount
(as per new Tax regime) 78000

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: No need for investments under 80C as her income is not in the taxable limit.

Ans: Understanding Section 80C
Section 80C of the Income Tax Act offers a deduction of up to ?1.5 lakh on your taxable income. This can be claimed by investing in various financial instruments. Here are some popular options that align with your goals:
1. Public Provident Fund (PPF):
• Pros: Safe, long-term investment with guaranteed returns.
• Cons: Lock-in period of 15 years.
2. Equity Linked Saving Scheme (ELSS):
• Pros: Potential for higher returns, shortest lock-in period (3 years).
• Cons: Market-linked risks.
3. National Pension Scheme (NPS):
• Pros: Tax benefits, pension income, additional deduction of ?50,000 under Section 80CCD(1B).
• Cons: Early withdrawal penalties.
4. Sukanya Samriddhi Yojana (SSY):
• Pros: Dedicated for a girl child, tax-free interest.
• Cons: Limited to two children, long-term investment.
5. Employee Provident Fund (EPF):
• Pros: Employer contribution, tax-free interest.
• Cons: Limited control over investment.
6. Tax-Saving Fixed Deposits:
• Pros: Relatively safe, fixed interest rate.
• Cons: Lower returns compared to other options.
Additional Tips:
• Diversify: Consider a mix of investments to manage risk and potentially maximize returns.
• Consult a financial advisor: Seek professional advice tailored to your specific financial situation and goals.
• Consider your risk tolerance: Choose investments that align with your comfort level.
• Review regularly: Periodically assess your investments to ensure they meet your evolving needs.
Remember: The best tax-saving strategy depends on your individual circumstances. It's essential to evaluate your financial goals, risk appetite, and time horizon before making investment decisions.