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04 Nov 2022

Last minute tax saving tips for senior citizens, pensioners and others

We are just a few days away and it is almost like the last chance to save tax during this financial year. In case you are a taxpayer or a senior citizen looking out for the best tax-saving tips at the last minute, here are a few investment options available to you under Section 80C (maximum total saving of Rs 1.5 Lakh in a financial year).

Some of them are one-time investments while others may require regular contributions to be made by you are:

1. Senior Citizen’s Saving Scheme (SCSS)

A very popular investment instrument meant only for those above 60 years of age. It provides a regular quarterly taxable income every three months currently offering 7.4% per annum. One can deposit a maximum of Rs 15 Lakh and the tenure of the deposit in SCSS is five years, further extendable by three more years. SCSS offers the highest post-tax returns as compared to all other fixed-income taxable instruments offered by the Government. So, it comes with the highest safety and is a regular income scheme.

2. Post Office Monthly Income Scheme (POMIS)

Almost similar to SCSS, currently the rate of interest is at 6.6% payable on a monthly basis, taxable, and the maximum investment allowed is Rs 4.5 Lakh in a single account and Rs 9 Lakh in a joint account. POMIS comes with the highest safety and is a regular income scheme.

3. National Savings Certificates (NSC)

Bought from Post Office, NSC currently offers a rate of interest of 6.8% per annum, tenure of 5 years, minimum Rs 1000 can be invested with no upper limit and the fully taxable interest is payable on maturity. NSC comes with the highest safety with compounding interest.

4. Pradhan Mantri Vaya Vandana Yojana (PMVVY)

It is a 10-year tenure government scheme managed by the LIC. It guarantees a certain monthly pension at a rate prevalent at the time of investment – currently 7.4% annually. Minimum and maximum investments respectively are Rs 1.5 Lakh and 15 Lakhs. Pension is taxable. So, it is the highest safety regular pension scheme.

5. Five Year Tax Saving Fixed Deposits (FDs)

All the banks as also the Post Office offer tax-saving FDs with a 5-year lock-in. The bank rates are about 6.3% right now while in the Post Office, it is 6.7%. The interest received is taxable and no premature encashment is allowed. So, it is a high safety scheme which may or may not have regular income as per your choice.

6. Public Provident Fund (PPF)

This is a long-term Post Office recurring scheme. If you have not opened a PPF account, you may take it provided you are comfortable with its long time frame. The maximum investment is Rs 1.5 Lakhs and the minimum is Rs 500 per year, you do not receive any regular income from it, the full tenure is 15 years and you are allowed to withdraw as per rules from the 6th year onwards. The maturity amount is fully tax-free. So, PPF is the highest safety, recurring investment scheme with no regular interest but all amounts tax-free on maturity or withdrawal.

7. National Pension System (NPS)

This is a pension scheme managed by seven fund managers under PFRDA rules. The tax saving is higher at Rs 2 Lakhs (under Sections 80C and 80CCD(1B)). Entry age is a maximum of up to 70 years of age while the withdrawal can be done earliest three years after entry if the entry has been done after 60 years of age. The amount of risk and safety taken depends on the account holder. So, it is a recurring investment scheme basically for getting a regular pension later and with higher tax limits.

8. Mutual Fund Tax Saving Scheme

Called ELSS (Equity Linked Saving Scheme), it is a 100% equity scheme with a 3-year individual lock-in of each money invested. It can be used for one-time bulk investment or recurring bulk / regular investment through the SIP (Systematic Investment Plan) route. After 3-year lock-in, the investment can be continued if one wishes to withdraw the fund value.

Some important tax-saving tips

Do not forget to claim the Section 80TTB exemption upto Rs 50,000 on interest from savings bank accounts and FDs. Medical insurance gives an additional tax saving of up to Rs 50,000 for senior citizens under section 80D. Remember, your income is tax-free up to Rs 3 Lakh. For those above 80 years of age, this limit is Rs 5 Lakhs.
While computing how much more to save for tax, do not forget to take into account your life insurance premiums, tuition fee paid for up to two children, and principal part of a home loan taken for a house.

(The author is a SEBI Registered Investment Advisor (RIA), and CEO, Hum Fauji Initiatives, a financial planning firm)

Check out the originally published article on by the author

If you need any further details or wish to connect with a Financial Planner, please write to team Hum Fauji Initiatives at
01 Jun 2017
Strategies for Managing a Fast Growing

Strategies for Managing a Fast Growing Company

Satya Nadella, CEO of Microsoft once said that, “Longevity in the business is about being able to reinvent yourself or invent the future.”If you’ve been part of a start-up that has experienced rapid growth, then you’ll understand how important it is to constantly improvise and build systems that measure qualitative factors such as customer satisfaction, day-to-day market learning and incorporating innovation.Of course, that sounds much easier said than done but it needs a lot of time, energy and effort from the Core team to bring change, embrace growth and scale up. Also, you will find yourself juggling between organizational and managerial changes while keeping up with an increase in sales.

Regardless of how beneficial or detrimental acceleration there has been, you have to sustain these challenging changes and you have to grow along. But, how do you do it? Here are some tips on how to manage a fast growing company basis my experience as a COO of Hum Fauji Initiatives.

Have a medium-term goal

Yes you read that right. When planning out business, people mostly aim for either short-term or long-term goals.But a series of medium-term goals serve as the stepping stone of the bigger vision i.e. marking a name for your brand and yourself. Many fast-growing business owners change their goals too often, never quite completing a plan before starting the next one. So set medium-term goals and deliver it. You can also seek short-term goals simultaneously like setting skills, gaining market experiences, business accomplishments, etc. that will help you achieve the medium-term objectives faster.It also helps the management team and works effectively to keep the pace of your brand ambassadors, the CFPs in case of Hum Fauji Initiatives. You facilitate your staff way this and it leads to a healthy work environment.

Keep your customers happy, always

Who do you want to see happy at the end of the day? Your customer. No matter what stage your company is, you can never stop listening to your customers. In fact they are the direct reflection of how your product or service is. So always find a way to communicate with them, get immediate feedback, and find a way to keep them happy. Put in place a formal approach to listening to customers all the time and acting on their input. In short, when customers are happy with your business, nothing can stop your company’s growth.

At Hum Fauji Initiatives, customer service and customer feedback is significant. We conduct timely trainings for our team to help them understand the consumer insights and preferences. It is also essential to integrate the company values in the entire team.

Build a good team 

Having team members with right kind of skills is essential for a fast growing company. To maintain the structure, system and vision of your company, you need to recruit and hire the best people available so they can run each of their departments. By doing so, you can focus on the overall strategy. And once you form that team, you ought to develop an approach to managing your growth, possibly with the help of a mentor. In last 7 years, we have been guiding our team internally through one to one counselling and we also do it with the external experts who master the skill-sets that we want to inculcate in our team members as per the evolving ecosystem of financial advisory services.

Find a great mentor

As an entrepreneur, you have lot on your shoulders. A mentor with experience as an entrepreneur or business executive can take a lot of weight off your shoulders. You have the benefit of their experiences and the advice of someone who has been there before.When you are touring or busy pulling more and more business, your mentor can handle your teams and guide their projects. A good mentor with defined roles will any day add better productivity.

Subtract the old, add the new.

When it comes to business, there can be lots of factors or strategies that used to work but not anymore. You have to get rid of them. There are probably a bunch of things you’ve always done that slowed you down without you realizing it. It could be the systems your team use or traditional way of communication. You have to constantly think of modes that can put your employees into something more productive.

Managing a fast growing business requires constant changes in tactics and sometimes it involves tough decision making. This can involve addition and subtraction in the services we deliver, the territories we expand and also at times the people we work with –you have to be vigil and rational be it the choice of vendors or the team. Here I do not mean to be judgemental about the people you work with but I am suggesting about the dilemma a business owner has to undergo and how necessary it is to be rational about the larger business goal – the vision that you had begun with.

By applying the above strategies and learning to manoeuvre quickly will help your business grow and succeed. At Hum Fauji Initiatives, it is been a full circle of experiences, dilemma, an array of events where we go to learn & unlearn and the above is as per my experience as a COO of this amazing dream initiative I chose to be a part of – the Hum Fauji Initiatives.

For more information, feel free to reach us on, or call + 011 – 4240 2032, 40545977, 49036836 or

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04 Apr 2012
Taxation of House Rent Allowance (HRA)

Taxation of House Rent Allowance (HRA)

We often come across people who consider HRA as the amount which is given in-lieu of accommodation and hence fully exempt from tax. There are an equal number of people who consider it as fully taxable – hence, if they get, say, Rs 20,000 as HRA per month, they consider that they are effectively getting only Rs 14,000 if they are in 30% tax bracket. None of the above is actually true, as explained below.

HRA is the amount paid by the employer to an employee as a part of the salary package. HRA is given to meet the cost of rented accommodation taken by the employee for his stay. A person can claim exemption on his house rent allowance (HRA) under the Income Tax Act if he stays in a rented house. The exemption of HRA is covered under Section 10 (13A) of the Income Tax Act and Rule 2A of the Income Tax Rules.

Two conditions should be met to avail the exemption on HRA:

  • The rent must actually be paid by the assessee for the rented premises which he occupies.
  • The rented premises must not be owned by him.

Please do not confuse the above two conditions as ‘conditions for grant of HRA’ – it is not so. These are the conditions to be met if you wish to seek Income Tax exemption on HRA which has been granted to you by your employer.

While calculating HRA, we effectively calculate the amount that is exempt from being considered as part of the salary. This implies that complete HRA will be considered as part of the salary, except the amount as calculated below.

The amount of HRA exempt is the LEAST of these 3 conditions:

  • Actual amount of HRA received by the person in the relevant period during which the rental accommodation was occupied by him.
  • Amount left after deducting one-tenth (1/10th) of the person’s salary for the relevant period from the actual rent paid by him (Rent paid minus 10% of salary). [Note: No deduction if rent paid does not exceed 10% of salary]
  • In case the house is in Mumbai, Calcutta, Delhi or Chennai, 50% of the salary of the person in the relevant period. In case the house is in any other place, 40% of the salary of the person in the relevant period.

Example to Calculate HRA

The deduction is available only for the period during which the rented house is occupied by the employee and not for any period after that. For example, during the year 2012-13, assume an assessee resides in Pune and gets a salary of Rs 8 lakhs as basic and Rs 3 lakhs as HRA. He pays an actual rent of Rs 2.4 lakhs.

Amount of HRA exempt would be least of the following three conditions:

  • Actual HRA received = Rs 3 Lakhs
  • Excess of rent paid over 10% of salary, i.e., Rs 2.4 lakhs less Rs 80,000 (which is 10% of Rs 8 lakhs salary) = Rs 1.6 lakhs.
  • 40% of salary (as the accommodation is in Pune), i.e., 40% of Rs 8 lakhs = Rs 3.2 lakhs.

As, out of these, Rs 1.6 lakhs is the least, it will be allowed as a deduction from salary for the year. Thus, HRA considered as part of the salary would be 3 lakhs less 1.6 Lakhs = Rs 1.4 lakhs, which will be counted as his taxable income.

Definition of salary

For the purpose of arriving at the deduction available, salary means the basic salary and also includes the Dearness Allowance (DA), if the terms of employment provide for it, and the Commission based on a fixed percentage of turnover achieved by the employee.

When is the deduction not available

The deduction for HRA is not available in case the employee lives in his own house. The deduction is also not available in case the employee does not pay any rent for the accommodation used by him, eg, living with his parents and paying no rent to them.

Feel free to write, mail us at or Buzz us in on tele numbers 011-4054 5977 / 4240 2032 / 4903 6836 or send us a SMS / Whatsapp on 9999 053 522


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