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

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.
Others

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.