Senior citizens in our country enjoy a wide range of benefits on various services and investments. Starting from the tax benefits, discounts on travel rates, exemptions on insurance policies to quicker and easy process of issuance of any documents there are many discounts that you can avail as a senior citizen. Here is a list of some of the major senior citizen benefits and how you can make the most out of it.
Tax Exemptions and Deductions
The tax exemption benefits for senior citizens include:
- Tax exemption on income up to 3 lakh
- The tax exemption up to Rs 50,000 on the interest income
- 5,000 concession in income tax liability
- Deduction up to Rs. 25,000 for medical insurance premiums
- Extended limit of maximum 15 lakh can be invested for medical insurance without medical check ups
- Mediclaim of up to 2 lakh for citizens of age group 60-80 years
- Exemption up to Rs 50,000 for insurance investment
Save the Most through Diverse investments
In order to enjoy all these tax benefits and make the most out of your retirement corpus, you can devise a diverse investment strategy. This strategy should include:
- Investment yielding fixed income
- Investment generating high return
- Investment with flexible liquidity
For example if you have a capital amount of Rs 30 lakhs including your savings and your retirement funds, here is how you can make the most out of the tax benefits.
Invest 13 lakhs in Senior Citizen Saving Scheme (SCSS) for 5 years, which gives returns at 8.5% interest rate per annum. Put another 5 lakhs in fixed deposit with NBFCs such as Bajaj Finance who provide the highest senior citizen fixed deposit interest rate of 8.20% for 3 years. Invest the remaining 12 lakhs as monthly investment of Rs 10,000 in equity mutual funds for a year.
According to the above-mentioned plan you have invested your money in fixed return generating SCSS scheme, high return giving senior citizen fixed deposit and mutual funds which have flexible liquidity. Through this scheme you will enjoy a quarterly income of Rs 27,950 through SCSS scheme where as your maturity amount would be of Rs 18, 59,000.
Once your FD (Fixed Deposit) matures at 3 years you will receive a sum of Rs 6,33,362 which you can withdraw or further deposit for another 3-5 years. The amount of returns you will get through the investment in mutual funds cannot be estimated. Picturing the worst scenario, the lowest percent equity funds can yield is 6%, even than you can get a matured amount of 1, 23,356 at the end of the year. Not to mention that you can withdraw the mutual funds investment any time without paying any charges in the time of any crisis.
Benefits on Loan and Insurance Policies
As the loans for senior citizens are available at discount rates you can avail loans for your big budget plans. You can also avail home loan on your pension scheme at lower interest rates and for higher amounts. If you are receiving a monthly pension of Rs 30,000 per month then you can avail a loan of amount Rs 15, 00,000. Similarly, you can also invest in life insurance and health cover to get a security against illness or major surgeries. As important it is to have a health cover you also enjoy the tax eexemption up to Rs 50,000 through such investments.
Leverage facilities for Senior Citizens
In addition to all the above mentioned financial benefits, you can enjoy various discounts and reservation options on travel. With a maximum of 50% discount on air and rail ravel tickets you can take trip anywhere in the country at lowest fares. Not only that, but you can also take the advantage of the specifically reserved seats for senior citizen during you journey. Also, senior citizens enjoy the ease of process of passport and other document issuance through hassle free process at various government centers.
With these discounts, it is ensured that you can avail maximum benefits of retired life and enjoy it to the fullest.