In the modern world, life has changed considerably, thanks to advancements in technology and new emerging trends. However, if there is something that hasn’t changed at all, it is the importance of having a family.
A supporting family is as relevant as it ever was. Your family members are always there to support you and care for you. In return, you want to keep them happy and secure forever. If you are the only earning individual in your family, you must be shouldering all sorts of responsibilities, both emotionally and financially. You work hard and look for new ways to earn additional income so that you can fulfill your loved one’s needs and give them a better life with each passing year.
However, in your struggle to save enough money, you also meet with the tax payment liability every year, which often feels like a considerable burden. Yet, you might not know that in your efforts to secure your loved ones, you can also increase your income tax savings. There are specific provisions under the IT Act,which offer you exemption benefits under investments to save tax.
Savings for income tax can help you utilize your hard-earned money for something more meaningful. Let’s dig deep to find out more about four ways in which your family can help you cut your taxes:
1. Buy health insurance for family members
A medical emergency can arise at any time. In such a case, you would like to provide your loved ones with quality healthcare treatment. It is because caring for your family members’ health is much more important than saving money for your life goals. Amidst the increasing cost of good quality treatment, you may end up utilizing all your savings to get the necessary treatment. A suitable health insurance plan helps you avoid financial burden at the time of medical emergencies. Alongside this, it can become part of your savings for income tax.
2. Invest in tax-saving instruments through your spouse
There is a specific limit to the tax-free investments you can make in a financial year. If the total taxable income is still high, you can increase your investments to save tax through your spouse.You can make more investments to save tax under your spouse’s name by choosing any instrument like PPF or ELSS. Keep in mind that provisions of clubbing income are applicable in such cases. So, you must ask your lawyer or C.A. before hand about the possible investments to save tax.
3. Give money to your spouse as a loan
If your spouse’s annual income is non-taxable or it falls into a lower tax slab, you can transfer money to her and show it as a loan transaction. This won’t include the monetary transaction into your income.
Make sure you know well about laws that govern the limits for such transactions before filing your ITR.
4. Buy child insurance plan
Your child’s future is of utmost importance to you, and you would do all that is possible to ensure happiness in his/her life. Since higher education costs have risen over time, your savings might not suffice to afford the best quality education for your child. For such instances, you can buy a child plan that also falls under the category of savings for income tax, while ensuring your children achieve their dream.
Max Life Child Insurance Plan that offers such financial plans to your child’s future even in your absence. Also, the premium paid towards child plans is exempted under Section 80C.
So, next time, you find it hard to deal with tax planning, you now know your family members are there for you in that aspect too. Choose investment options wisely to save income tax and ensure your choices don’t increase your financial liabilities in the long run....