Government has not specified any specific retirement plans and benefits, it’s on our part to take full benefits of the different provisions of the Income Tax Act and utilize savings in a manner to financially secure post retirement life. Planning for retirement is needed to everyone whether he is an employee or engaged in any business or profession. Planning for retirement should be done considering present tax implication and future taxability. Here are few retirement planning tips: Maintain a separate Income Tax File in name of HUF Any person, who is Hindu, can maintain separate file for the HUF and it is irrelevant whether they have ancestral property or not. HUF will get separate exemption for which an individual assessee is entitled and section 80C deduction in respect of LIC premium, PPF contribution, NSC, etc. up to Rs.1 lakh is also available. Moreover, 80CCF deduction can be claimed by investing Rs. 20,000 in infrastructure bond. HUF can receive tax free gifts up to Rs. 50000, HUF can earn income from all the heads of income except income from salary. Contribute to Post Office MIS or Senior Citizen Saving Scheme When it comes to tax planning for retirement, priority should be given to regular income and considering the same you can contribute to Post Office MIS (Monthly income Scheme), which gives return 8% or invest to Senior Citizen Saving Scheme which offers 9% maximum investment & the maximum investment allowed is Rs. 15 lakh. Invest in Life Insurance premium (LIC) Life insurance allows an individual to provide the financial security to the family member and protects them from uncertainties and eventualities of life. It helps you to save money for your future and have sufficient funds at the retirement. Moreover, amount invested in LIC is allowed as deduction u/s 80C. Invest in Public Provident Fund Public Provident Fund (PPF) is one of the best tax saving and investment plan. Minimum deposit required to be invested in a PPF account is Rs. 500 and maximum is Rs. 1,00,000 in a financial year and the maturity period of the PPF account is 15 years, with 8 per cent rate of interest compounded annually. PPF is totally tax free i.e, deposit made in PPF is eligible for deduction u/s 80C, interest earned on the PPF Account is also exempt u/s 10 and withdrawal received from the PPF account is also exempt from the tax. Investment in Mutual Funds One can think of investment in growth mutual funds in case of surplus funds and get tax free income from dividends. Dividend on equities is also tax free but not regular. One of the investment of which you can think about, from which specified monthly income can be earned by you is Investment in monthly income plan from mutual fund. It gives you a stable amount of funds each month to spend. Drafting a Will Each individual particularly above the age of 40 years should take the time to create a will, as it will provide a legal declaration for disposing of property after the death. Life insurance proceeds and other retirement benefits will also pass to the named beneficiary. Taxmantra.com provides full fledged comprehensive tax planning service wherein we suggest the best investment and tax saving plans, which would minimize your total tax on income.