Tax planning Towards 60+ and after

Reduced tax on passive income Credit and deduction on interest Exemption from

pension , Exemption from, annuity from, investment provident fund Amendment

190 Combinations to maximize tax benefits

Quote from “ITA guidance" "The initial rate of tax on property income specified in this chapter is generally 31%. Property income associated with a person who has reached the age of 60 or more will be charged at the tax rates applicable to personal income as long as a fixed tax rate is not set for property income.

Why average passive income always has a low tax rate for people aged 60+

Because the ceiling on most passive income is about 25% and when performing a calculation according to the tax brackets, only in the amount of NIS 1 million, the effective tax gets to 25%

35% exemption on non-residential real estate used in business

Rent from a property owned by you that was used directly

To generate income from a business or profession, up to the income ceiling (101.2K)

When it is multiplied by the eligibility rate, the eligibility rate - a rate of 2% for each tax year in which

The property was used directly to generate personal income

Credit and deduction for bank and deposit interest for low-income people and those born 1948 and before Bank deposit-automatic repayment. In a savings policy, a tax return / refund must be submitted after making a notional redemption during the tax year

associated with a person who has

reached the age of 60 or more will be

charged at the tax rates applicable to

personal income as long as a fixed

tax rate is not set for property

income.

Reduced tax on

passive income

Importance of

Exempt Income

Since those aged

60 + are taxed according to marginal tax,

the more income that does not settle on these tax levels,

the lower the levels. This is more significant for above

average income earners. Low income earners, with the

help of personal credits, can not pay tax at all and their

difference compared to those aged 60 and under is

significant. In this income the gross tax is about 11 % i. e.

already a benefit is given as compared to regular taxation.

Higher than average earners earn relatively more by

generating exempt income as this is how they turn the

brackets to non exempt income. For them, investing in

exempt channels leads in retrospect to reduced taxation

for their passive income.

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