Income Tax Saving With Your Spouse
- DetailsWritten by PolicyBazaar -
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Updated date : 24 June 2020
When it comes to marriage, it surely has its perk but simultaneously it also has a baggage of responsibilities. We all know the road of marriage is not a smooth ride.
Moreover, in the times we are living today, both the partners are working then they share the day to day expenses. In a marriage, you share your life with the other person and the needs and expenses are taken care of duly. Right from paying the EMI’s to investing in an asset, or any other investment plan to what not?
Likewise, you also look forward to options that are income tax saving, which implies that you can save money.
Wondering how to save income tax?
Well, in case you are unaware or uninformed, your spouse can help you to save the income tax.
The Companion of Joys and Sorrows
Yes, your spouse will help you in come income tax saving just like assisting in meeting all the personal and social obligations respectively.
So, now you must be thinking...
How Can the Spouse be Helpful in Income Tax Saving?
Well, to answer your question, there are specific tax benefits, which will help you to enhance the tax savings through your spouse.
One by one, let us take an understanding of the important aspects, which will help you in income tax saving.
According to Section 112A, an individual can guarantee an underlying exemption up to Rs 1 lakh upon long-term capital increases emerging at a bargain/move of recorded equity shares or units of schemes that are equity-specific each year given the Security Transaction Tax (STT) is duly paid. Besides the exemption can be guaranteed by every citizen paying taxes, these investments can be done in the names of both the partners to profit the advantage of this exemption consistently as long as it is conceivable.
Buy a Health Insurance Policy
Section 80D permits a person and HUF to claim deduction till Rs 25,000 for health insurance premium for self as well as family. In any case, the real expense of purchasing a health insurance policy is high to such an extent that even the limit of Rs 25,000 isn't adequate for the whole family to be satisfactorily secured.
With the limit of Rs 25,000 accessible under Section, 80D incorporates a sub-limit of an amount of Rs 5,000 for a preventive check-up in regards to health, as far as possible accessible for health insurance premium comes down to Rs 20,000 if you are profiting tax benefit of preventive check-up in regards to the health. The health insurance premium paid beyond what these limits can't be claimed within Section 80 D in the vast majority of the cases if simply a single spouse is the taxpayer. Nonetheless, on the off chance that your companion is likewise a taxpayer, the health insurance policy can be purchased in such a manner to guarantee, that both the mates can claim the fullest potential advantages of Section 80D while guaranteeing that the whole family gets satisfactory health insurance cover.
Educational Expenses of the Children
In this day and age, Indian income tax laws permit to claim a deduction for expenses incurred towards education acquired in any school, college, university, or any Indian educational institutions in regard of full-time training of two of your children, within Section C, up to a measure of Rs 1.50 lakh in one year.
This derivation is accessible alongside other qualified things like PF, PPF, ULIP and so forth. Since this advantage must be asserted for two children, if multiple children mean more than two children, the other spouse can likewise claim these costs for up to extra two children as the constraint of two children is relevant for a taxpayer and surely not a family. If you don't have multiple children, however, the costs on training for your children surpass the limit accessible within Section 80 C; these costs can be bifurcated between both the parents and in such a manner to boost the amount of claim.
Home Loan Benefits
Section 80C of the Income Tax Act permits an individual and a HUF to claim to the reason for specific things, which are practically required like provident fund, life insurance premium and reimbursement of housing loans. With expanded property costs and subsequently upgraded measure of home loan, the measure of the reimbursement of the principal amount itself surpasses the most extreme accessible limit of Rs 1.50 lakh in a large portion of the cases.
This outcome in the majority of the home loan borrowers not having the option to claim the full advantage of home loan reimbursement accessible within Section 80C. In such a case if just a single life partner is working, the advantage concerning such flooding home loan reimbursement is lost. In any case, if both the mates are procuring, the reasoning for home loan reimbursement of Rs 1.50 lakh can be asserted by the two given the two mates are joint proprietors and co-borrowers also.
By and by all the citizens are permitted to claim interest on a home loan till Rs 2 lakh in regard of property utilized for self-occupation. So in the event of a together possessed house on, which a home loan is taken in joint names and adjusted by both the life partners, both of them can easily claim the deduction of Rs 2 lakh each within Section 24(b). Besides, there is a constraint of Rs 2 lakh consistently on set-off of misfortunes under the head 'salary from house property" against different earnings. In this way, it bodes well for both the companions to become joint proprietors and co-borrowers to make both qualified to claim the advantage of set-off of up to Rs 2 lakh in every life partner's ITR for intrigue paid on the home loan. If the property is let out, the restriction of Rs 2 lakh will apply after inside setting off the available segment of the rent got.
Leave Travel Allowance (LTA)
An individual can benefit from the leave travel allowance (LTA) when two journeys have been undertaken within the block tenure of four years. In case, both the spouses are working and employed then both the spouses can claim to leave travel allowance for a total of four journeys for four years, which implies that they can plan holidays and travel each year during the block period of 4 years. It is to be noted that there is no limit in terms of the deduction for LTA.
Wrapping it Up
From the above-mentioned pointers, it is evident that there are no separate tax benefits accessible for a spouse who is working, however, the spouse who is working can still make the most from the provisions that are existing within the tax laws and likewise minimize the tax liability in totality for the family as one unit and contribute in income tax saving.
Moreover, before opting any tax-saving instrument, it is prudent to consider the risk level, liquidity, returns and lock-in period. Opt for a tax saving instrument only if it is required and fulfil your needs. It is advisable to all the taxpayers to be familiar with the various income tax laws that would help you in income tax saving, which will significantly reduce the burden of the tax.
On a lighter note, the tax laws are subject to change therefore, conduct thorough research from your end too.
Happy Income Tax Saving!
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