Expert’s tax saving tips for every working couple

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tax saving tips for every working couple

Under Income Tax saving Act, 1961, the government of India imposes a tax on every individual whose income is taxable. The Income Tax is the key revenue generator for the government.

Every individual pays a certain amount to the government for the particular financial year. Levy of income tax is different for every individual according to his/her income slab and rate. However, along with paying taxes you can claim certain deductions under various categories. And it is why people plan their tax properly. It is also necessary for working couples to be good with taxes.

What are tax deductions?

Tax deductions are deductions made from your taxable income to help you save taxes. You can claim deductions under various categories according to your expenses and investments. Expenses such as tuition fees, medical expenses are valid to claim deductions. Whereas, investing in life insurance plans, retirement savings schemes, and national savings schemes, etc helps you save both income as well as income tax.

Tax saving tips for working couples:

Are you just married and planning to invest and save money with your spouse? As individuals if both of you are working, both of you are liable for taxation. However, you can save taxes through deductions both, individually and with your partner for life. Following are some tips, you might want to consider while planning your expenses and investments:

1. Deductions through investment

When both spouses are working, it is advantageous for both to do investments and claim deductions. However, when deduction limit is not crossed, it is advantageous for the spouse with the higher income to claim deductions on investments. As higher the income, higher the tax outgo.

2. Make the most of home loan tax benefits

Most young couples dream to buy their own home.  In most of the cases, buying a home means seeking a home loan first. While seeking a home loan, the couple must go for Joint Home Loan.

By availing a Joint Home Loan, the couple can claim for a tax deduction on the principal amount up to the limit allowed under section 80C of the Income Tax Act. They can each claim for up to Rs. 1.5 lakh on the loan they are paying. However, the deductions are available for spouses who have proportional ownership in the house that is 50-50 share of the ownership.

3. By claiming HRA

House Rent Allowance (HRA) is for salaried individuals who live in rented houses. Individuals can claim HRA to lower down the tax outgo. In a couple’s case, if one of the spouses owns the house, the other partner can pay him/her a rent and claim HRA.  However, the spouses can simply share the HRA if they reside in a rented house.

4. Creating HUF

As a couple, you can form an HUF (Hindu Undivided Family) and transfer additional income to it such as income generating assets. You can also transfer incomes received from any individual as a gift to you. Any income received to the member of HUF is taxable only under HUF and not to the individual. One can claim the same deductions for an HUF as for an individual, this way your total tax outgo will be lesser.

5. By forming a trust

Spouses can form a trust as per Section 164 of the Income Tax Act. A trust is to safeguard the interests of a beneficiary. Spouses can create trust for their unborn child by transferring funds and income generating properties to the trust. One can also create trust for his/her grandson/granddaughter. The rent of the property is taxable and allowed for deduction.

6. Making use of Leave Travel Allowance

An individual can claim Leave Travel Allowance (LTA) once in every 4 years. As a couple, you can travel every year using your respective LTA alternatively every year. Thus, every year you can take a vacation and enjoy the benefits.

7. Keeping a check on drawings

Drawings are withdrawal of funds from an account. Make sure the one with the higher income slab does the most drawings. In relation with investments, if the one with the higher income slab does the drawing and investment, he/she is liable for lesser tax after claiming the deductions.

The above tips were especially for young couples. However, older couples may also save taxes using these tips. There are many other allowances such as academic allowance, hostel allowance, etc, for which you can claim deductions.

Conclusion:

The government gives us various opportunities to incorporate savings in our day-to-day life and along with that save taxes. By proper planning of home, finances and savings, you can save taxes. There are several allowances provided to individuals for which one can claim deductions. As a couple, too you can save taxes by opting for saving schemes and claiming deductions.

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All India ITR, one of India’s leading tax prep websites offering personal tax solutions focussing on income tax return filing through tech platforms, be it the web, Android or iOS, is dedicated to making tax returns as easy and convenient and yet as complete as possible. With value added services to help maximise tax savings and minimise tax outgo and tax investment advice the comparative advantage of specialization allows us to uniquely serve our clients. All India ITR is certified to conduct E-return intermediary services by the Income Tax Department of India.

3 COMMENTS

  1. Found this to be interesting blog and can be followed by each and every working couple to save themselves.It includes areas regarding tax deduction and Tax saving tips for working couples explained in neat and aligned manner.It genuinely helped me with the information i was seeking for. Appreciate it .

  2. Thanks this blog has really helped me alot. This really helps and tells a process that is required to fill up an Income tax return. This blog tell us step by step how we should fill taxes and yes it is also easy to understand. Each and every details have been mentioned in simple and clear language.
    i would prefer anyone to have a eye on it to clear all their doubts. The best thing about this blog is that we can get every information hear only. we shoud not go on different side to search about itr. Great work keep it up.It tell breifly and accurately about taxes. The blog is very detailed and the way it explains the things is very easy to understand and to retain it really helps a person on how to fill up the ITR and how to enquire about it. Great work from ALL INDIA ITR since it is a very well written and a very useful blog.

  3. Well, this is very informative article that help me to understand about all the way that we can save taxes while e-filling for every working couple that are looking on it, and well it highlighted all the main points that most of the people were facing today, like- Expenses such as tuition fees, medical expenses are valid to claim deductions. Whereas, investing in life insurance plans, retirement savings schemes, and national savings schemes, etc helps you save both income as well as income tax, this tips is reawlly helpful.

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