Senior Citizens- Tax Planning

The exemption limit for senior citizens is Rs 250000 and age limit is between 60 & 80. After 80 years the category of very senior citizens starts & their exemption limit is Rs 500000.

The short term capital gains for senior citizens will be tax free if the basic threshold limit of 15% is not crossed.

Public Provident Funds or the PPF are also very attractive source of investment for senior citizens as it allows an exemption upto Rs. 70, 000 for all citizens of India.

Senior citizens do not have to pay advance tax.

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Tax Planning for Current Financial Year

Today people are earning more so they need proper tax planning but most of us wait till the last month for planning our tax. We should plan it at the starting of the year so that we can also get benefit of returns from those investments. Most of us know the deductions under section 80C but today we are discussing deductions under section 80s( other than 80C).

1. Section 80D- for premium paid for medical insurance- Rs15000 or Rs 20000 in case of senior citizens

2. Section 80DDB- for expenditure incurred in respect of medical treatment- max. Rs 40,000 or Rs 60000 […] Read more

TAX PLANNING

Tax planning is arrangement of financial activities in such a way that maximum tax benefits, as provided in income tax act, are availed of. Usually people confuse tax planning with tax avoidance and tax evasion. But these three are different terms.
TAX AVOIDANCE: It is the act of dodging without directly breaking the law. It is done with a purpose to defraud the revenue.
TAX EVASION: Through tax evasion dishonest tax payers try to reduce their taxes by concealing income, inflation of expenses, etc.

The most important step in tax planning is divide and rule i.e. total income of family should be divided […] Read more