Pensions - What Should I Do ?

shirlrn2351 asked:


we are both retired from NY state jobs, we want to move out of NY, but don’t want to pay income tax on pensions.

Gabrielle

scenicruzer asked:


As part of a division of assets, I was required to split my company pension and transfer 50% to my ex-common-law wife. Can I deduct this from my income tax?
As part of a division of assets, I was required to split my company pension and transfer 50% to my ex-common-law wife. Can I deduct this from my income tax?
also, keep in mind this is in Manitoba/Canada.

Derek

Maria Rain asked:


• Congratulations for achieving 65 years of age.

Key points to remember:

o The pension received is taxable just like salary income. You are a normal income tax assessee like any other salaried person.

o If TDS is not deducted from your income because you are a senior citizen, then it does not mean that you don’t have to report that income.

o Being a senior citizen, you can invest in instruments like Senior Citizens Savings Scheme. You can invest up to Rs. 15 lakh in this scheme and earn 9% interest, payable quarterly. The tenure of the scheme is 5 years, which can be extended by another 3 years.

o You can also invest in post office monthly income plan which gives 8% interest per annum, payable monthly.

o You should shift investments to tax-free instruments like dividend-bearing stocks and mutual funds.

o You should commute your pension policy since one-third of the commuted amount is tax-free. Since it has to be decided at the time of retirement, you should plan the pension before retirement.

o You can buy property and reverse mortgage it to get tax-free income. This will not only give you regular income, you will also make an asset/gift for your family.

• Key points:

• Do not keep unexplained assets

o If you are found in possession of any asset like cash, jewellery, stocks or mutual funds for which you are not able to produce or explain the source of income, then it is taxable as unexplained money.

o You should always keep the records of your income and the money spent on foreign trips, credit cards, etc.

o The penalty for such concealment of income is al least the amount of tax evaded and could be up to 3 times the tax evaded. This penalty is on top of the tax evaded, which has to be paid as normal income tax.

www.taxspanner.com



Felipe