Defence Pensioners and Civil pensioners both may get burden of Income tax if the pension amount exceeds Rs 3,00,000/- per annum. here are details of some eligible duductions and Special Income Tax Effect 2023 for Pensioners. So, you must aware of income tax savings tips :
Save Income Tax by Investing in Tax-Saving Schemes
Pensioners can invest in tax-saving schemes such as Public Provident Fund (PPF), National Pension System (NPS), and Equity-Linked Saving Scheme (ELSS) to claim tax deductions under Section 80C of the Income Tax Act.
Rent out a house to Save Income Tax
If a pensioner owns a house that is not self-occupied, they can earn rental income from it, which is eligible for a tax deduction under Section 24 of the Income Tax Act.
Medical expenses are Exempted from Income Tax
Pensioners can claim a tax deduction for medical expenses, including the cost of health check-ups, treatments, and surgeries. These deductions are eligible under Section 80D of the Income Tax Act.
Income Tax Exemption : Maintenance of dependent parents
Pensioners can claim deductions for the maintenance of their dependent parents under Section 80DDB of the Income Tax Act.
Tax benefits on National Saving Certificates (NSCs)
National Saving Certificates (NSCs) offer tax benefits under Section 80C of the Income Tax Act.
Benefit of Income Tax with Home loan interest
If a pensioner has taken a home loan, the interest paid on it is eligible for a tax deduction under Section 24 of the Income Tax Act.
Clubbing of income to avail Tax Savings Benefit
Pensioners can club the income of their spouse or dependent children with their own income, which can help lower their overall tax liability.
Keep records and claim all eligible deductions
Pensioners must maintain all the records of the investments and expenses they have made so they can claim all the deductions they are eligible for.
Disability pension of Armed Forces Pensioners are fully Exempted from Income Tax
Disability pension comprised of two element viz (1) Service elementt (equal to Service pension) and (2) Disability Element (Depends on % of disability and Basic Pay. Both the element is exempted and to be shown while you file e-filing in the Income Tax Portal at the Exempted Income Category Section under the suitable Head (Military Medical Disability Pension)
It’s important to consult a chartered accountant or tax advisor to understand how these tips apply to your specific circumstances, and how the latest tax laws and regulations may affect your tax planning.
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