Tax Saving Tips for Working Couples
We are just a few months away from the end of the monetary year, and many of us have begun this year’s tax preparation. A proficient tax strategy may be accomplished for a working couple by making joint use of their double investment profits and profits tax laws to their advantage. Here are six smart tips to help save more and maximize resources for working couples.
1 Effectively utilizing investments
It would be beneficial for the spouse in the higher tax bracket to seek deductions from the tax savings investment in which the couple has jointly invested if the spouses are subject to different tax rates.
2 Loans from the Shared Home
It’s helpful for couples to go for joint loans while applying for a home loan. Now, for the same home loan, spouses will separately demand the maximum Rs 1 lakh deduction on the primary repayment and Rs 1.5 lakhs on interest payment. The couple can then jointly claim primary repayment of Rs . 2 lakhs and repayment of interest of Rs. 3 lakhs. The income tax advantages are true in relation to the arrangement of ownership.
3 The Aspect of the HRA
The use of one’s house rent allowance (HRA) is recommended as it is moderately tax-free, given the rent is ultimately paid. If one of the spouses occupies the property, he/she might be paying rent by the other spouse to claim HRA, thus reducing his taxable income. The HRA exemption for the rent given may be shared by the couple if the couple resides in a rented house.
4 Using LTA advantages
LTA advantages could be asserted twice in a four-calendar year slab, as per the current rules. Alternatively, spouses must demand an exception per year when seeking LTA (Leave Travel Allowance). In this way, they could jointly demand an LTA exclusion of four trips in a four-year block.
5 HUF Advantages
Did you and your wife take advantage of taxable gifts? Starting a HUF then could prove to be a saving for you. Any amount of income earned as a member of a HUF (Hindu Undivided Family) by a person is considered to be taxable only in the hands of the HUF and not in the case of an individual. There are the same slabs and exemptions for the HUF revenue as for an individual. Possibly, working couples will get, via a HUF, an exemption of Rs 160000, in addition.
6 Saving Taxes through a Trust
By establishing a trust pursuant to section 164 of the Income Tax Act, partners may also get additional exemptions. For the unborn daughter or son, a private trust may be formed by allocating funds to the trust through the transfer of the properties, the rent of which would be the trust’s assets.
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