Income Tax Savings from the Spouse

Updated: Sep 11, 2018

There are certain tax benefits by way of which a person can have tax savings through your spouse and which are provided in the income tax act.

Will discuss In detailed....

1. Deduction for Expenses incurred for children for assesse and his spouse:

An assesse can claim deduction for education expenses incurred in any university, college, school or educational institution in India in respect of full time education of maximum of two of your children up to an amount of Rs. 1.50 lakhs in a year along with other eligible deductions under Section 80C. Since this allowance is available in respect of two children only and if there are more than two children, spouse can claim deduction for additional two more children as the limit of two children is per tax payer and not per family.

2. Deduction in respect of Medical Insurance:

Section 80D of Income Tax act allows an Individual and HUF to claim deduction upto Rs. 25,000 for medical insurance premium for self and family. This limit of Rs. 25,000 includes a sub limit of Rs. 5,000 for preventive health check up, so the effective limit available for health insurance premium comes to Rs. 20,000 in case you are availing tax benefit of preventive health check up. Health insurance premium paid in excess of these limits can not be claimed under Section 80 D in most of the cases. But the health insurance can be bought in such a way so as to ensure that both the spouse are able to claim the fullest benefits of Section 80D while ensuring that the entire family has adequate health insurance cover. 

3. Deductions for Home Loan:

Section 80 C of the income tax act allows an individual and an HUF to claim deduction on repayment of housing loans. Due to the increased property prices the amount of principal repayment itself exceeds the maximum limit of Rs. 1.50 lakhs. 

Effectively most of the home loan borrowers are not able to claim the full benefit of home loan repayment under Section 80C. In such cases home loan repayment can be claimed by both of them if they are joint owners and co-borrowers. With restriction on set off of losses under the head income from house property against other incomes only upto Rs. 2 Lakhs, it makes sense for both the spouses to become joint owners and co borrowers to become eligible to claim this benefit of set off of upto Rs. 2 lakhs in each spouse’s ITR.

4. Benefits in respect of house property

As per Income from House Property, A person is allowed to have only one property for self occupation and thus does not pay any tax on that. For other properties the owner has to offer notional rent in respect of such additional property for taxation though he has not received any rent. In case other spouse is working and earning, then one more property can be had in his/her name and thus between the husband and wife two properties can be treated as self -occupied and no need to offer any amount of notional rent for taxation. 

The above benefits can be claimed, if the spouse has sufficient income chargeable to tax and take deduction of above benefits offered.

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