 |
Pension is Taxable, But There are Other Tax-free Avenues
Author: Maria Rain  | Posted: 02-04-2008 | Comments: 0 | Views: 79 | Rating: (125)  (?) 
• Congratulations for achieving 65 years of age.
Key points to remember:
o The pension received is taxable just like salary income. You are a normal income tax assessee like any other salaried person.
o If TDS is not deducted from your income because you are a senior citizen, then it does not mean that you don't have to report that income.
o Being a senior citizen, you can invest in instruments like Senior Citizens Savings Scheme. You can invest up to Rs. 15 lakh in this scheme and earn 9% interest, payable quarterly. The tenure of the scheme is 5 years, which can be extended by another 3 years.
o You can also invest in post office monthly income plan which gives 8% interest per annum, payable monthly.
o You should shift investments to tax-free instruments like dividend-bearing stocks and mutual funds.
o You should commute your pension policy since one-third of the commuted amount is tax-free. Since it has to be decided at the time of retirement, you should plan the pension before retirement.
o You can buy property and reverse mortgage it to get tax-free income. This will not only give you regular income, you will also make an asset/gift for your family.
• Key points:
• Do not keep unexplained assets
o If you are found in possession of any asset like cash, jewellery, stocks or mutual funds for which you are not able to produce or explain the source of income, then it is taxable as unexplained money.
o You should always keep the records of your income and the money spent on foreign trips, credit cards, etc.
o The penalty for such concealment of income is al least the amount of tax evaded and could be up to 3 times the tax evaded. This penalty is on top of the tax evaded, which has to be paid as normal income tax.
www.taxspanner.com
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/taxes-articles/pension-is-taxable-but-there-are-other-taxfree-avenues-375903.html
About the Author:I could handle life without sweets and namkeen, chips and dips, butter and oil, biscuits and gravy, and even milk and ice cream. But morning time tea , Sweets, Namkeen and Bhujia life without how serve.
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Got a Question? Ask.
Ask the community a question about this article:
Q&A Powered by: 
Latest Taxes Articles
10 Best Charity Car Donation Tax Deduction Tips
By: Helen Hecker | 19/08/2008
These are some of the most important and best charity car donation tips you'll need to consider before donating your car, truck, van or other any other vehicle.
Do You Need Information on Tax Auditing?
By: Uchenna Ani-Okoye | 19/08/2008
This is a topic almost everyone you speak those words to, would like to avoid. No one wants to experience an audit first hand; however, tax audits do not have to be the 'monsters' we've made them out to be. There are audits for personal returns, corporate returns, and small business returns.
My Guide to Self-Employment Tax
By: Uchenna Ani-Okoye | 19/08/2008
If you are a self-employed individual, you will have a Schedule C to attach to your Form 1040, and self-employment tax is computed on Form 1040, Schedule SE.
4 Ways To Reduce Your Tax Bill
By: David De Souza | 14/08/2008
Four ways to save on your tax bill.
Capital Gains Tax Loopholes Shrinking
By: Carol Freyer | 14/08/2008
Seems the new 2008 housing bill was not a savior for all of us - like a scorpion there is a little kick in the tail! However, struggling home owners can breathe easy, the kick is not directed at them, in fact, it is aimed at real estate investors.
The Importance Of Your Tax Return
By: Geoff Hibbert | 11/08/2008
An explanation of the consequesnces of not filing HMRC returns on time.
Roni Deutch Discusses the 10 Biggest Tax Evaders in US History
By: Roni Deutch | 11/08/2008
By definition, tax evasion is the conscious effort to avoid paying taxes through illegal means. So when taxpayers knowingly misrepresent or conceal the truth from tax authorities about their financial situation in order to reduce tax liability, they are committing tax evasion. To help put tax evasion into perspective, The Tax Lady Roni Deutch has compiled the following list of the biggest tax evaders of all time.
How High Gas Prices Affect United States Taxpayers
By: Roni Deutch | 11/08/2008
Everyone who has a car is already feeling the effects soaring gas prices are having on the economy. However, in addition to extra out of pocket expenses at the pump, high gasoline prices are having a wide range of affects on the American public.
More from Maria Rain
Can the Computer Replace Your Chartered Accountant?
By: Maria Rain | 03/06/2008 | Taxes
Can the computer replace your chartered accountant? Yes, says a software firm, which is aiming its only product at the small-time taxpayer who can't afford the hassles of finding a person to help file tax returns.
Tax Spanner - an online income tax preparation and filing tool for India at
taxspanner.com - offers to help you "e-file" your income tax return in three easy steps.
Income Tax Refund, You Can Revised Your Return Till 31st March 2010
By: Maria Rain | 10/04/2008 | Taxes
o If more tax has been deducted from your income, then you are entitled to get a refund cheque from the income tax department.
o Time to get such refund is unpredictable, so it is suggested not to overpay and to do your calculations wisely. The interest paid by the income tax department on your refund is very low, so it is better to invest the money in higher return investment than waiting for refund.
o If you e-file your return, then you stand a chance of getting faster refund.
Interest From Fixed Deposits, Savings Accounts, Nsc is Fully Taxable
By: Maria Rain | 10/04/2008 | Taxes
o All incomes need to be reported, whether exempt from income tax or not.
o Interest earned on bank accounts (savings and FD) are generally not reported due to misconception. Interest income, including accrued interest on NSC is taxable.
o Money received due to compulsory acquisition of land is also taxable. Even the rent received from cell phone tower on roof of your house is taxable.
o
Amount Above Rs. 50,000 Received From Non-relatives is Taxable
By: Maria Rain | 09/04/2008 | Taxes
Amount above Rs. 50,000 received from non-relatives is taxable
• If you receive more than Rs. 50,000 during the financial year without any consideration, then the entire sum is taxable, provided it has been received from any source(s) other than the ones mentioned below:
o On the occasion of marriage
o Under a will or by way of inheritance
o Gift from a relative
o In contemplation of death
How to File Income Tax Return (e-filing)
By: Maria Rain | 04/02/2008 | Taxes
E-filing is essentially another mode of filing your income tax return, in addition to the popular mode of printing and submitting your return at the income tax counters. It is a two step process
Due Date of Filing Income Tax Return
By: Maria Rain | 01/02/2008 | Taxes
Due date is the date prescribed by the department as the last date of filing return. For Individuals who are not liable to be audited the due date prescribed for filing return is 31st July 2008 unless extended further by a seperate notification.
Web Hosting: Dedicated Web Hosting
By: Maria Rain | 31/10/2007 | Web Hosting
Today there are many web hosting service providers that provide advance-hosting services. These advanced hosting services come with more user friendly and better performance features that are suitable for high traffic volume, faster performance and better storage facilities and greater bandwidth.
Mauritius Tours and Vacations
By: Maria Rain | 31/10/2007 | Exotic Locations
Welcome to destination travels, we offer discount holiday packages for Mauritius tour, vacations and holidays.
|
|
Finance 
