My Life, My Decisions
                                                 (A Life Time Decision)


The future depends on how we plan the present.If the planning and decisions are right, the future is definitely good.              ...A renowned Economist.

Income tax computation for Retired people:

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Retired people from Government , Public or Private sector are getting good pension now as such , even after retirement they need to compute their Income Tax and file Income Tax return. Therefore , they too need to plan their tax liability by going for different types of savings available, so that lesser tax implications is there. They can file their return on their own or take the help of a chartered accountant, but they must understand , how the tax liability is being computed.

As soon as the financial year is over, they must start planning for filing their ITR. For doing that they must get the Savings Bank Account updated, so that Interest paid must be available in the passbook/Statement. Following documents will be required for filing the ITR.

The documents required are by and large the same. These are:

Incase , you are re-employed (after retirement) or engaged in some consultancy or self empoyed , Income details for that also is required to be provided for tax calculation. Similarly, some additional benefits also can be availaed of as mentioned hereunder:

Example- Tax Calculation

Computation of Taxable Income
Description Break-up Amount
Pension Income 50,000 x 12 6,00,000
Salary/Business Income(if any) 25,000 x 12 3,00,000
Saving A/c Interest- from All Banks 50,000
FDR Interest- Bank1 1,50,000
FDR Interest- Bank2 1,00,000
Less: Deduction under Chapter VI-A
Deduction u/s 80C
PPF,LIC,ELSS etc. 1,50,000
U/S 80D (Payment of Medical Insurance Premium ) 40,000
NET INCOME 10,10,000

(A)--- Tax Due (1010000-250000)*.2 1,52,000
(B)--- Education Cess( 3%) 45,600
(C)--- Tax Payable (A+B) 64,301
(D)--- TDS Deducted (if any) 0
NET TAX PAYABLE (C-D) 1,97,000

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