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Tax Expert - Answered on Jul 15, 2023

Asked on - Jul 14, 2023Translate

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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.
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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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