InvestorQ : How can I save tax on my income?
Diya Chitale made post

How can I save tax on my income?

Abigail Ghoshal answered.
2 years ago
Well, you will be happy to know that your family members like your parents, children, and spouse could help you in saving tax, here’s how:

Buy health insurance for your parents, spouse, children, etc. – You can claim a  maximum deduction of Rs 50,000 if your parents are above the age of 60 or if your parents are below that age, you can claim a maximum deduction up to Rs 25,000. You can also buy health insurance for self, spouse and children and the maximum deduction allowed in that case shall be Rs. 25,000 which is in addition to the deduction allowed for insurance of parents. This means you can claim a total of Rs 75,000 as a maximum deduction under section 80D. You can also claim an additional deduction of Rs. 5,000 for medical expenses incurred.

Dependents with disability/disease: You can claim deduction under section 80DD and 80DDB in respect of payments made towards the treatment of dependent on disability (severe or normal) by providing a medical certificate from the government hospital.

By paying rent to your parents: This is a loophole if I say, if you are living with your parents you can pay rent to them and avail HRA exemption on your salary income. However, one thing that you need to know is that the house shall be owned by any of your parents and you should not be the co-owner of the house.

Investment in your parent’s name: You can also save tax by giving a certain amount as a gift to your parents if they are under a lower tax slab. Also, if your parents are senior citizens then they may help you earn higher interest income by way of fixed deposits as higher interest rates are offered on senior citizens deposits.

Buy property jointly with your spouse: It has many tax benefits as one can split the amount of property and claim deduction accordingly. If the property generates any taxable income, it would be taxable in the hands of both husband and wife in the ratio of their salary.

Tuition fee paid for children: School fee paid for children’s education is eligible for deduction up to the fee paid of two children.