As the returns filing date gets closer, you try your very best to claim maximum tax deductions. But do you know that even your family members can help you in this endeavour? Read this post to know more.
Be it emotional support or life problems; your family members always have your back. But do you know that you can rely on your family members far saving taxes too? Different types of investments and expenses made for family members are also eligible for tax deductions. Here is a list of some top options-
- Purchasing Health Insurance
You can claim for a tax deduction of up to Rs. 25,000 in a financial year under Section 80D for premiums paid towards a medical insurance policy. This limit of Rs. 25,000 is available for medical policies purchased for self and spouse and children.
You can claim an additional deduction of up to Rs. 25,000 for premiums paid towards a health policy purchased for your parent below 60 years. The deduction limit is up to Rs. 50,000 for policies purchased for a parent above 60 years. So, if you have purchased a health plan for yourself and an above 60 years parent, the deduction limit will be up to Rs. 75,000.
- Invest in the Name of Your Spouse
If you have exhausted the 80C limit of Rs. 1.5 lakhs, you do have the option to invest your money in the name of your non-earning spouse. You can consider investing in tax-free options like ELSS mutual fund or EPF in your spouse’ name
- Split the Home Loan with Your Spouse
If you have taken a home loan or planning to take one with your working spouse, you can apply for a joint loan. As per the current IT rules, you can claim deductions of up to Rs. 3.5 lakhs on home loan in a financial year.
Out of this, Rs. 1.5 lakhs deduction is available on the principal amount repayment under Section 80C, and Rs. 2 lakhs deduction is available on home loan interest under Section 24. But take a joint loan, and both you and your spouse can individually claim Rs. 3.5 lakhs deduction.
- Consider Child Investment Plans
Most people already know that the tuition fees paid for a child are eligible for tax deduction under Section 80C. You also have the option to open a minor PPF account in the name of your child. But your contribution to your PPF account and your child’s PPF account cannot be more than Rs. 1 lakh in a year.
You also have the option to purchase a child investment plan. These are mostly ULIPs that combine life insurance with investment. As these too are life insurance plans, the premiums of up to Rs. 1.5 lakhs are eligible for deductions under Section 80C.
Family for Tax-Savings Too
As you can see, there are different ways in which your family members can help you reduce your income tax liability. If you are new to taxes, do consider professional help to make the best use of the available tax deductions and exemptions.
But always remember that don’t just invest or spend with the sole aim of saving taxes. Do focus on your needs, finances, and future goals to select options that add more value to your life while also helping you save taxes.