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:
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.
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.
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.