Query: I’m retiring in March 2022 with a pension of approx Rs. 30,000 per 30 days and lump sum cost of Rs. 75 lakh. The place can I make investments safely to handle month-to-month family bills and earn tax free revenue?
Reply: At current there isn’t a tax-free instrument accessible. Nevertheless, you should purchase tax-free bonds issued by varied PSU (Public Sector Undertakings) and Reserve Financial institution of India (RBI) prior to now from the inventory trade. These tax free bonds can be found at premium to the difficulty value and should not tax environment friendly for people who find themselves not in larger tax slabs so I might advise you to take a position as below:
Out of your retirement corpus you’ll be able to make investments Rs. 15 lakh in Senior Citizen Saving Scheme which presents you a greater price of seven.40% and which is fastened for the tenure of 5 years and is paid quarterly. You possibly can make investments extra Rs. 15 lakh in Pradhan Mantri Vaya Vandana Yojana which additionally offers you 7.40% p.a. fastened for ten years.
The stability will be invested in RBI floating price saving bonds. with none restrict and that are equally secure and on the identical time give you higher returns than different related merchandise accessible available in the market. The curiosity on these bonds is reviewed half yearly. These bonds have a tenure of seven years. Presently these bonds supply 7.15% annual curiosity. The curiosity on these bonds is payable half yearly and the speed is bench marked towards curiosity payable on Nationwide Saving Certificates (NSC).
The rate of interest will all the time be 0.35% larger than curiosity on NSC relevant on the time of revision of rate of interest. Within the current circumstances these are the most suitable choice potential the truth that you can not danger your capital. Revenue from all of the funding devices acknowledged are taxable and aside from Pradhan Mantri Vay Vandana Yojana tax may also be deducted at supply on the curiosity payable. You possibly can submit type no. 15G for cost of curiosity with out deduction of tax in case you fulfill the eligibility circumstances.
Balwant Jain is a tax and funding professional and will be reached on jainbalwant@gmail and @jainbalwant on Twitter.com.
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