Were you aware that your spouse can help you save on taxes in addition to meeting your personal obligations? Yes! There are a few ways in which this is possible. Let us have a look at some of the provisions:
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Children Expenses
Currently, as per the Income Tax laws, you can claim a deduction for the expenses of education of two children that are incurred in any school, college, university, etc., upto Rs 1.50 lakh a year u/s 80C. As this can be claimed just for 2 children, in case of more than 2 children, these additional expenses for 2 more children can be claimed by the other spouse. However, if you have 2 children, but the expenses surpass the limit u/s 80C, the parents can bifurcate the amount amongst themselves and maximize the claim.
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Medical Insurance
U/s 80D, an individual and HUF can claim a deduction upto Rs. 25,000 related to a premium of medical insurance for self as well as family. If your spouse also is a taxpayer, then you can buy the insurance in a way to make sure that both spouses can make the maximum claim in addition to ensuring adequate health insurance for the family.
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Leave Travel Allowance (LTA)
LTA benefit can be availed for 2 journeys during the block of 4 years. If both spouses are employed, LTA can be claimed together for 4 journeys taken during the block of 4 years and they can go on vacation each year during the 4-year block. LTA deduction does not have an absolute limit.
- Home loan
U/s 80 C, if both spouses are employed and earning, the home loan repayment deduction of Rs.1.50 lakhs can be claimed easily by both spouses; however, they must be joint owners as well as co-borrowers. Currently, taxpayers are entitled to claim an interest upto Rs.2 lakhs, on the home loan for the property being purchased for self-occupation. So, both earning spouses who are co-borrowers and joint owners can easily claim this deduction.
- Equity Investments
Both spouses can make investments and claim the Rs.1 lakh initial exemption u/s 112A on the long-term capital gains on sale/transfer of any listed equity shares.
Though there might not be separate tax benefits for a spouse who is working, the existing provisions can be used to reduce the overall liability.
