Earn above Rs 12 lakh? Here's how you can make your retirement plan tax-efficient
Saving for retirement used to be easy. But in the past few years, there have been several amendments in tax rules for retirement products. Many instruments are now in the tax net. At the same time, individuals earning up to Rs 12 lakh a year will pay no tax under the new regime, which is a massive relief for millions of taxpayers.
If your income is more than Rs 12 lakh a year, here's how you can make your nest egg tax efficient.
Stocks and equity funds:
Long-term capital gains from stocks and equity-oriented funds are now taxed at 12.5%. But there is a Rs 1.25 lakh tax-free threshold that can help small investors avoid the tax. They should harvest long-term gains of up to Rs 1.25 lakh every year by booking profits, and then buying back the same stocks or mutual funds.
Also Read |
ITR filing FY 2024-25: Top 8 mistakes first-time tax filers make; how to avoid them in AY 2025–26
Ulips:
Maturity proceeds of Ulips are taxable if the combined premium of policies bought after 1 February 2021 exceeds Rs.2.5 lakh.
To avoid the tax, restrict investments in Ulips to Rs.2.5 lakh in a year. If you need to invest more for retirement, use mutual funds or the NPS to fatten your nest egg. NPS investments can also help you save more tax.
Traditional insurance policies:
The maturity proceeds of life insurance plans have also been made taxable if the total premium of policies bought after 31 March 2023 is over Rs 5 lakh. Don't put more than Rs 5 lakh in traditional insurance plans.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Prepárate para replantearte todo en lo que crees
Movistar Plus
Mirar Ahora
Undo
Use debt funds and the NPS if you need to invest more.
Debt funds:
There is now no distinction between long-term and short-term gains from debt funds. These funds are also no longer eligible for the indexation benefit. All gains will be added to income and taxed at slab rates. Even so, debt funds help defer tax because the gains are taxed only when you redeem. Keep investing in debt funds and redeem after retirement when your income and tax liability will be lower.
Also Read |
ITR filing FY 2024-25: Why filing Income Tax Return is important even if you have no tax to pay - explained
Provident Fund:
The Provident Fund has always been seen as a tax-free haven. But three years ago, the interest earned on contributions to the Employees' Provident Fund beyond Rs 2.5 lakh in a year were made taxable. To get past this, restrict contributions to Rs 2.5 lakh a year. Investors who want to put in more should open a PPF account, if they don't already have one. They can also go for debt funds to defer tax.
Stay informed with the latest
business
news, updates on
bank holidays
and
public holidays
.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
19 minutes ago
- Time of India
Licenses of eight krishi kendras suspended and sales halted at two over fertilizer sales irregularities
Nagpur: The licences of eight Krishi Seva Kendras (agriculture service centres) have been suspended, and sales at two others were halted due to irregularities in the sale of chemical fertilisers—urea and DAP. The action followed a probe conducted by the district agricultural superintendent. Inspections carried out by taluka-level quality control inspectors and flying squads revealed violations at several centres, including Om Ganesh, Rohit, Himanshu, Vaibhav, Mauli, and Shri Krishna Krishi Seva Kendras. Sources said the centres failed to provide satisfactory responses to the queries raised by the agriculture department. Nagpur district has 1,495 licensed Krishi Seva Kendras, all of which are being routinely inspected by full-time quality control inspectors assigned to each taluka. So far, 118 samples of chemical fertilisers have been tested, of which 16 were found to be substandard. This led to police action and the filing of 12 court cases. In addition, 1.20 metric tonnes of stock worth ₹1.35 lakh was seized. To prevent a shortage of urea in the district, a target was set to reserve 3,550 metric tonnes, of which 3,445 metric tonnes have already been secured. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Access all TV channels anywhere, anytime Techno Mag Learn More Undo This stock was released in two phases and is now available at the agricultural centres. Another 3,830 metric tonnes of urea from companies like KRIBHCO and HUFL is expected to arrive this week. District superintendent agricultural officer Ravindra Manohare said that despite 11,000 metric tonnes of urea showing as available on PoS (Point of Sale) machines, some centres were found selling fertilisers without using the machines, which led to the suspension of their licences. Manohare added that centres must display price and stock information, maintain updated stock registers, and sell fertilisers strictly through PoS machines to ensure transparency and avoid hoarding. He urged farmers to report irregularities at centres to the quality control inspector. Farmers can also contact the superintendent agricultural cfficer directly at mobile number 9420971630 or the control room at 0712-2560786. For the ongoing Kharif season, Nagpur district was allocated 42,544 metric tonnes of urea up to August 31. As of Sunday, 48,896 metric tonnes—114% of the allocation—have been supplied. Of this, 36,986 metric tonnes were sold via PoS machines, while 11,910 metric tonnes remain in stock. However, discrepancies were found between PoS records and the actual stock at some centres, prompting a special verification drive. To ensure the timely availability of quality fertilisers and to curb malpractice, the district agriculture department has activated its quality control teams. Special inspection drives have been launched, with flying squads comprising agricultural development officers, district quality control officers, and taluka inspectors actively monitoring fertiliser sales and stock. The Zilla Parishad Agriculture Department has also launched a blog to provide farmers with real-time updates on fertiliser availability across all licensed centres in the district. Get the latest lifestyle updates on Times of India, along with Friendship Day wishes , messages and quotes !
Time of India
19 minutes ago
- Time of India
Minister M B Rajesh to inaugurate Kudumbashree home shop project
Kochi: Local self govt minister M B Rajesh will inaugurate the state-level convention of entrepreneurs functioning under Kudumbashree home shop project on Monday at Samra Convention Centre in Kalamassery. The project is initiated to establish a socially driven marketing and distribution system for products by women entrepreneurs. The home shop community marketing network operates through three components: entrepreneurs, home shop owners and management team. Products are collected from entrepreneurs and delivered to consumers by home shop owners, who are members of Kudumbashree. Marketing and administration are conducted through the management team. By connecting local producers and consumers and delivering quality products to homes, the project significantly contributed to local economic growth. In the 2024–25 fiscal, the project generated a revenue of Rs 18.66 crore. Currently, over 7,000 home shop owners and more than 1,000 entrepreneurs operate under 51 management teams. The event, which will celebrate the project's 15th anniversary, will be attended by minister P Rajeeve, executive director of Kudumbashree H Dineshan, Hibi Eden, MP, district panchayat president Manoj Moothedan, special secretary of local self-govt department T V Anupama and district collector N S K Umesh IAS. Get the latest lifestyle updates on Times of India, along with Friendship Day wishes , messages and quotes !
Time of India
19 minutes ago
- Time of India
UPI data: GST Council may grant amnesty to small vendors, says central tax commissioner
Bengaluru: The GST Council could consider granting amnesty from interest and penalties to small vendors who have been issued tax notices based on UPI transaction data, according to Kotraswamy M, commissioner of central taxes. "If this issue is being flagged because there are so many taxpayers, the GST Council can take a call, giving amnesty to them from interest and penalty. So, there is a solution rather than making it a political issue," he said at an awareness and grievance redressal seminar organised by Rotary Bangalore, JP Nagar. The official's statement comes after chief minister Siddaramaiah's assurance that only traders with a turnover exceeding Rs 40 lakh on goods would be scrutinised, and old dues will not be enforced if vendors register for GST going forward. You Can Also Check: Bengaluru AQI | Weather in Bengaluru | Bank Holidays in Bengaluru | Public Holidays in Bengaluru Kotraswamy acknowledged discomfort and confusion caused by the GST notices among small business owners, attributing it to a lack of digital literacy and awareness. "Maybe their digital education is not adequate, they are not aware and feel that something bad has happened," he said, adding that once they know what they are supposed to do, they will find nothing wrong with the notices. The tax official also emphasised the importance of understanding legal requirements for businesses. "The transactions are captured in some way - digitally or through banking transactions, UPI or whatever. If somebody provided services with an annual turnover of more than Rs 20 lakh, or goods worth more than Rs 40 lakh, they are supposed to register themselves," he explained. Amrita Ranjan, principal commissioner of income tax, Bengaluru, confirmed that the department will continue to identify cases of tax violations. "... When the code works, it will work on a threshold and we will identify the cases," she added. BOX: What rules say It is mandatory for businesses with annual sales of Rs 40 lakh or more for supply of goods, and Rs 20 lakh or more for the supply of services, to register for GST. The Union govt also made it clear that it is not planning to levy GST on UPI transactions exceeding Rs 2,000, the finance ministry clarified in the Rajya Sabha last week after confusion caused by notices issued based on UPI data. Get the latest lifestyle updates on Times of India, along with Friendship Day wishes , messages and quotes !
