There’s nothing like saving tax with your spouse. Speaking of sharing the burden. If you join hands with your spouse to save taxes, you can save a lot of money.
Saving taxes comes with its own unique challenges. You may make multiple investments, and still pay a lot in tax. This is when you think, joint money-management and investment plans.
These are some of the tips which can help couples save a lot of money in income taxes. Want to know more on tax planning? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
There’s nothing like having your own roof over your head. If you avail a home loan to buy your dream house/apartment, you also end up saving a lot in tax. You save even more in taxes, if you avail a joint home loan with spouse.
When it comes to a joint home loan, the couple (both husband + wife) save taxes provided both are working. Tax benefits on a joint home loan are in the ratio of the home loan burden shared.
You get an income tax exemption up to Rs 2 Lakhs a year on the Home Loan EMI (Interest), for a self-occupied house. Your working wife also gets this income tax exemption of Rs 2 Lakhs a year.
So the total limit of a couple can go up to Rs 4 Lakhs a year, which is Rs 2 Lakhs individually, provided the couple has co-borrowed in a 50:50 ratio.
The same rule holds for the EMI (Principal) on the home loan. You get a tax deduction up to a maximum of Rs 1.5 Lakhs a year under Section 80C. So, you and spouse can get a maximum deduction up to Rs 3 Lakhs a year.
The total deduction (Principal + Interest) on home loan EMIs for you and spouse is a massive Rs 7 Lakhs a year.
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Avail a joint life insurance plan
One of the most popular ways to save taxes is still the good old life insurance plan. You and spouse can avail a joint term life insurance plan, where you both can claim an income tax exemption under Section 80C.
The premium on the joint term life insurance plan is calculated as per your age and that of your spouse.
SEE ALSO: How To Avoid Excess TDS?
The HUF can help save taxes
The Hindu Undivided Family popularly called HUF, is a popular way of saving taxes. A Hindu, a Buddhist, a Jain or even a Sikh family can form an HUF. The HUF has their own PAN, bank accounts and even files income taxes, independent of its members.
Each HUF has a legal deed, which contains details of members and businesses of the HUF. The HUF enjoys Section 80 deductions and even other tax exemptions.
HUF helps save taxes when rental income is earned in self or jointly-owned properties, as the tax liability gets absorbed by the HUF and not by the individual members.
See Also: Income tax return status
A couple can plan their tax-saving investments in such a way that the overall tax liability of the household decreases. If your wife earns more than you and falls in the 30% tax bracket, more tax saving investments will be made in her name from her own money.
If you fall in the 20% tax bracket, you may focus on wealth creation and savings and not bother too much on tax savings. Be Wise, Get Rich.
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