Sushil Girdher 36 years young Telecom Engineer working in a PSU Telecom Company practising Technical analysis from last 2 years and as a hobby studied indian income tax for salaried person in detail, loves creative writing

How Working Couples can Save Tax

2 min read

New Year has started and the financial year is near to end. Most of us would by now have started tax planning. A working couple by jointly making use of their dual income and following income tax rules to their advantage can efficiently manage Tax.

In my very first article on this website, i am going to share some tips which can help couples to save more and plan efficiently for their financial life

save taxes



1.Joint Home Loans

While applying for a home loan, it is better for couples to go for joint loans. By this, both could individually claim a maximum deduction of Rs 1 lakh on the principal repayment and Rs 1.5 lakhs on interest payment, for the same home loan. In this way , together the couple gets to claim Rs. 2 lakhs principal repayment and Rs. 3 lakhs interest repayment. In order to avail the tax benefits through this provision the couple getting the loan also has to be the joint owner of the property. The share in tax exemption that each of them gets is in proportion to the share in the home loan availed by them. If the couple own the house jointly in the ratio of 50:50, both can claim deductions in equal proportion. Therefore, if tax slabs of both are different, ownership share is need to worked out in a manner that the spouse in the higher tax bracket owns a bigger share.

2. LTC consideration

If both husband and wife are eligible for LTC, both of them can claim it individually. The rules of LTC apply individually to each, which means that each spouse can claim LTC twice in a block of four years. Thus, a family can claim LTC exemption four times in a block of four years if both spouses are eligible for LTC. The only restriction is that both spouses can not claim LTC exemption for the same journey.While claiming LTC (Leave Travel Concession), spouses should claim exemption alternatively each year. This way, together they could claim an exemption of four journeys in a block of four years. There is no need for them to take the precaution of not travelling twice during the same year.

3. Making a Trust to save Tax

If a working couple has children, say, one son and one daughter, each one can form a trust for the would-be spouse of one child separately in such a manner that the initial exemption under the provisions of Section 164 of the Income Tax Act is available. If the couple does not have a child, then the husband can have a trust for the unborn son, and the wife a trust for the unborn child daughter to get a separate exemption. Besides, if you worship some deity, you can have a private religious trust for one’s chosen deity. Such a trust would be liable to assessment as a separate taxpayer under the category of artificial juridical person and would enjoy a separate exemption.

4. Using Investments Judiciously

If spouses fall in different tax brackets, it is advantageous for the spouse in the higher tax bracket to claim deductions from the tax saving investments, which the couple has invested in. For example,in some cases one spouse, say the wife, may be paying the life insurance premium (LIP), say of Rs 20,000, and her total income is say Rs 215,000 she may like to pay the life insurance premium herself so as to get deduction under Section 80C and bring down the total income to Rs 195,000 so that she may not be liable to pay any tax . It may be that in her husband’s case full deduction may not be available for Rs 100,000 under Section 80C and his income may be liable to the maximum rate of tax. Then, it would be better and worthwhile to claim the deduction in her husband’s name rather than that of the wife.

Sushil Girdher 36 years young Telecom Engineer working in a PSU Telecom Company practising Technical analysis from last 2 years and as a hobby studied indian income tax for salaried person in detail, loves creative writing

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