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 Income Tax: Here’s the ways that can help you Save Tax
Income Tax: Here’s the ways that can help you Save Tax

March 16, 2021

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About the income taxes, some money heads can be linked with the particular family members in the way of providing the tax breaks. The members of the family can prove instrumental in giving the financial advantages.

Furnishing the taxes on the hard-earned money is so disgusting. An individual has sometimes looked towards the ideas to assist them in securing the taxes. On the other side, there are various tools via which one can protect the taxes like investing in life insurance, public provident fund, superannuation fund, Mutual Funds SIP, and more, some of these may not produce a favorable return.

Who will not like to claim the lawful opportunity when it comes to saving the taxes, Section 80C is inside the effective go-to avenues to claim the privilege on the investments. If you have worn out all the choices in a personal capacity then your parents, children, and spouse can assist you in reducing the tax liability.

Let us see some of the methods where your dependents can assist you in protecting the taxes.

Buy Health Insurance for your Parents, Wife, and Children

Health insurance is all needed which can assist you in protecting the taxes. One can protect the taxes on health insurance premium for a maximum of Rs 1 lakh for the case if you and your parent’s age exceeds 60 years.

Beneath section 80D of the income tax act, the deduction can be availed for the health insurance premiums consisting of preventive healthcare check-up costs for yourself, spouse, and your children.

Moreover, if you purchase health insurance for your parents you can provide an additional deduction from your income if your parents are senior residents. In this method, you can get the tax-saving deduction advantages of Rs 75k.

Dependents with the Disease or Disability

The deduction beneath section 80DD of the income tax act is permitted to resident peoples or HUFs for the dependent who is distinctively abled and is fully dependent on the individual or HUF for support and maintenance.

It is a concern with several conditions such as deduction is permitted for the dependent of the assessee excluding itself. The assessee is not permitted for this deduction if the dependent has availed a deduction beneath section 80U for himself or herself. Dependent in the case of the particular assessee constitutes spouse, children, parents, brothers & sisters of the assessee. In case of the HUF consists of the members of the HUF. The assessee has suffered expenses for a medical treatment which consists of nursing, training & rehabilitation of the differently-abled dependant Disability of the dependent is not lower than 40%. Disability is established beneath section 2(i) of the individual with Disabilities Act, 1995.

When the status meets the amount of deduction permitted is Rs 75k which is started from the Fiscal year 2015-16 in which the disability exceeds 40% or lower than 80%. Rs 1,25,000 (Starting from the financial year 2015-16) in which the disability exceeds 80%. These deductions are permitted without any relation to the real expenditure.

Furnishing Rent to the Parents

Through the submission of rent receipts and paying that an individual is entitled to avail the privilege on the house rent allowance (HRA). your parents can cut down the property taxes and also availed 30% standard deduction upon the rental income. If they are in the lesser tax slab then you and the family can secure the complete tax. If their age exceeds 60 years old they will indeed enjoy the more min income privilege limit (Rs.3 lakh for those who have aged exceeds 60 years old and Rs.5 lakh for those who are aged exceeds 80 years old). If they do not have any income which is taxable they will be subjected to secure enough tax as a family.

For instance, 22-year-old Prashant lives in Dwarka New Delhi along with his parents. He does daily ups and downs from his home to his office which is located in Gurgaon. Aditya has started working in recent times and his employer’s question for the tax-saving declarations for the financial year 2018-19 to compute TDS on salary. Prashant’s colleagues who reside in Gurgaon in PG accommodation were furnishing rent receipts to avail HRA. HRA is filed to them under their salary. Prashant can avail of HRA by filing the rent to his parents. But the rent filed to Prashant’s father will need to be engaged in his father’s total income.

Furnishing the Tuition Fees of the Children

The parents can avail of the deduction on the amount filed as tuition fees in the university, school, or other educational institution. The other parts of fees such as transportation fees, development fees are not subjected to deduction beneath section 80C.

The maximum deduction upon the payments filed for the tuition fee can be availed for Rs 1.5 lakh together via deduction against the insurance, provident fund, pension, etc. in a financial year. But must take care of the income tax due date every time to get the benefits on time.

Loan Against Education

The education loan assists you not only in finance your foreign studies however it can protect you. If one has taken the loan and repays the similar then the interest filed on the education loan is permitted as a deduction from the total income beneath section 80E. But the deduction is given upon the interest action of the EMI.

The person can avail of this deduction. It is not present to HUF or the additional type of assessee. Towards the higher education of self, spouse or children or for a student for whom the person is the legal guardian. The same deduction can be availed by the parents towards the loan opted for the higher studies of their children.

Buying the Property with a Spouse

Buying the joint property with your spouse is payable under income tax benefits. Your loan eligibility automatically raises when your spouse is the co-owner of the property. It prolongs the tax advantages for both wife and husband for the interest upon the amount which has been borrowed. But the husband, as well as the wife, will not be liable to avail the similar amount thus they had to divide that. A similar is the case with rent of the property which is co-owned amid them. If your spouse and you have not displayed the share in the property, then the share is being divided towards tax to give the efficiency to average the slabs of tax.

Investing Towards the Parent’s Name

If your parents fall in the non-taxable or less tax slab, then you can invest upon the names by giving them money. Gifts given to relatives do not come under the tax. The sum is invested towards the senior citizens saving policy, post office, or other tax-saving policy after the office or the other tax-saving policy and despite the popular bank FDs. the senior citizens are permitted tax privilege of up to Rs 50k upon income comes from interest from saving or FDs inside any bank, post office, or cooperative against Rs 10k for non-senior peoples. Despite if the interest is more than the privilege limit the tax liability will still be lower than yours. For an individual whose age is less than 60 years the tax-exempt limit is Rs 2.5 lakh but for senior citizens above 60 years, it is Rs 3 lakh, and for senior citizens above 80 years, it is Rs 5 lakh.


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