Sir, My father (Senior citizen-age 65yrs) is getting pension Rs 60000 p.a. only now he got an offer for 3 months @ Rs 150000/ month on which employer is going to deduct service tax @ 10.34 % (Approx). Please advise if any is there scheme to save / get refund all tax. He has no PPF account at present & want to go for minimum locking period of his saved money.
1 Answers
For senior citizens, till 2.5 lacs there is no income tax.
So if your father earns 5.1 lacs (450000 from 3 months job and 60000 as pension) in FY 2011-12, income tax payable will be (20% of 10,000) + (10% of 2.5 lacs) = 27000 plus education cess.
Please see various tax saving avenues on this page: Different sections to save income tax.
As per your father's age, Senior citizen saving scheme (SCSS) and five years' fixed deposits seems to be the best options.
But still whole income tax won't be saved as maximum 1 lac can be invested as per section 80-C, so still around 16,000 income tax have to be paid.
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