WAYS IN WHICH YOUR FAMILY CAN SAVE YOUR TAX

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WAYS IN WHICH YOUR FAMILY CAN SAVE YOUR TAX

Every people want their tax liability to come as minimum as possible. But how can we reduce our tax liability? The only solution is the tax planning. Some people in the eye of tax planning do the tax evasion. Every tax payer has to understand the proper ways in which we can save tax.

Following are the some ways by which your family can help you to save tax.

  1. Buy health insurance for your spouse, children, and parents.

   Under Section 80D, you can get deductions up to Rs 25,000 for parents under the       age of 60, and Rs 50,000 if they are above 60. These limits are over and above the 80D limit of Rs 25,000 for health insurance purchased for self, spouse and dependent children.

Insured Deduction for self

Rs.

 Deduction for Parents Rs. Total deduction

Rs.
Self (including spouse, children) under 60, and parents also under 60

 

 25000 25000 50000
Self below 60, but parents above 60 25000 50000 75000
Parents and individual both above 60 years

 

 50000 50000 100000
  1. Dependents with disability/disease: You may claim tax deduction under 80DD and 80DDB .

80DD

If your dependant relatives are differently abled and wholly dependent on you, you can claim deductions under section 80DD for:

  • Any expenses incurred by tax payer for their medical treatment which includes nursing, training as well as rehabilitation of dependents who are disabled.
  • The amount paid towards Life Insurance Corporation (LIC), Unit Trust of India (UTI) or any of the other insurers solely to buy specified schemes or insurance policies to help in the maintenance of a disability.
  • The medical certificate from government is necessary to claim deduction.
  • Handicapped dependent relatives can be your spouse and dependent parents, children or siblings.

80DDB

  • Section 80DDB of the provides a deduction towards amount paid for medical treatment of specified diseases in respect of senior citizens as well as in case of very senior citizens up to Rs 1 lakh, subject to specified conditions. Deduction is avaible for medical expenditure by the tax payer for the treatment of self or spouse, Children, dependent parents and siblings.
80DD Disability between 40%-80% –Deduction of Rs.75000

Disability beyond 80%- Deduction of Rs.125000

 Expenditure on differently-abled dependent

 
80DDB Rs 40000– If dependent is below 60 years

Rs 100000 (maximum deduction) –If dependent is above 60 years

 Expenditure on specified disease
  1. Save tax via tuition fee paid for children 

School tuition  fees paid by tax payers for the education of his\ her children’s will be  eligible as deduction under section 80C. The deduction can be claimed by a parent who pays the tuition fee from his income and the deduction is available only for two children.
Note: The deduction is available only for tuition fees paid and not for the exam fees and other fees

 

 

  1. Pays the rent of house to your parents

Salaried individual can pay the rent of their house to their parents can claim the benefit of  HRA exemption. However the property should be owned by one or both the parents. Tax payer can’t be co owner of the property. The rent you pay is income in the hands of your parents, and their income will be taxed as per the prevalent tax slab. Also, if your rent amount exceeds Rs 1 lakh a year, you need to submit the PAN card details of your parents to the employer .

  1. Invest money on the name of your parents.

You can give gift to your parents if their income is taxable in lower slab rate. This amount will not attract any gift tax in their hands. You can open fixed deposits in your parents’ name with this amount. If your parents are in a lower tax slab, then the tax they will pay on the interest on the FD will be less than what you would have had to pay if you had put the same amount as a FD in your own name.

Bhushan Tidke

(Article Assistant)

Nagpur

 

 

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