How to save tax with the help of your spouse
Marriage brings with it its own bag of responsibilities and benefits. If your spouse and you are both employed, you can share your expenses. For instance, both can contribute towards paying the EMIs of the home or buying your dream car.
While you look for many ways to save money, your spouse can also help you save taxes. Read on to know.
Take a joint Home Loan
You are eligible for multiple tax benefits if you purchase a home through a Home Loan. However, if you are buying the home jointly with your spouse, you can double your tax benefits. For instance, under Section 24(b) of the Income Tax Act, 1961, you can claim a deduction of Rs 2 lakh on the interest paid on your home loan. But if you take a Home Loan with your spouse, you can avail a total deduction of Rs 4 lakh (Rs 2 lakh each) on the interest payment, provided you co-borrow in the ratio of 50:50.
You can also claim a tax deduction on the repayments of the principal amount of the Home Loan. This deduction is available up to a maximum limit of Rs 1.5 lakh for an individual. However, if you co-borrow the loan with your spouse, you can extend this deduction to Rs 3 lakh (Rs 1.5 lakh each).
Looking to apply for an HDFC Bank Home Loan? Get started here!
Avail of joint Life Insurance
You can claim a tax deduction on the premium paid for your spouse’s policy under Section 80C of the Income Tax Act, capped up to a limit of Rs 1.5 lakh.
Moreover, you can enjoy additional benefits when you take a joint Life Insurance policy with your spouse. Firstly, the premium on a joint insurance policy is lower than individual plans. Secondly, it also benefits you as you can avail of higher tax deductions. Although taken jointly, you both can claim a deduction of the insurance investment under Section 80C individually.
Secure your partner’s health
Investing in Health Insurance is a smart way of covering the many medical expenses that may occur in your lifetime. Additionally, Health Insurance also helps you avail of tax benefits.
Under Section 80D of the Income Tax Act, you are eligible for a tax deduction on the amount you pay as a premium for your Health Insurance, up to a limit of Rs 25,000. You can claim a higher deduction by paying the premium of your spouse’s Health Insurance policy and clubbing it in your expenses. You can claim a deduction on the premium you pay for yourself and your spouse up to a limit of Rs 25,000.
Premium on your Health Insurance – Rs 14,000
Premium on your spouse’s Health Insurance – Rs 10,000
Total deduction you can avail of – Rs 25,000
Taxable income – Rs 3,00,000
Deduction under Section 80D – Rs 24,000
Taxable income – Rs 2,76,000
By paying for your spouse’s Health Insurance, you can reduce your taxable income by Rs 10,000.
A companion through your joys and sorrows, your partner can help you manage your finances, too. Save taxes by investing in tax-saving products with the assistance of HDFC Bank services and reduce your taxable income and tax outgo.
Investor can claim a deduction of a maximum of Rs. 1.5 lakh per annum by investing in a tax-saving FD. Know about your returns with FD Calculator.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities.