While the relationship between husband and wife is primarily emotional, it can also be financially beneficial. Engaging in certain joint financial transactions can generate substantial tax savings. By following three key strategies, you and your wife can save up to Rs 7 lakh in income tax.
1. Education loan in your wife’s name
If your wife wants to pursue her studies, taking an education loan in her name can be very beneficial. You can claim a tax exemption on the interest paid on this loan for a maximum period of eight years, as per Section 80E of the Income Tax Act. Make sure that the loan is from a recognised bank or government institution.
2. Invest in the stock market
By making long-term investments in the stock market in your wife’s name, you can avail tax exemptions on capital gains up to Rs 1 lakh. This is especially effective if your wife’s income is low or if she is a housewife. Transferring money to them for investment purposes can maximize your family’s overall tax savings.
3. Joint home loan
Couples often consider buying a home together. By taking out a joint home loan and registering the property in both names, you can double the tax benefits. Both partners can claim up to Rs 1.5 lakh each from the principal amount under section 80C, for a total of Rs 3 lakh. Additionally, under Section 24, both can claim up to Rs 2 lakh each on the interest paid, taking the total potential tax benefit to Rs 7 lakh. Actual savings will depend on the amount of the home loan.
By strategically managing joint financial transactions, couples can not only achieve their financial goals, but also significantly reduce their tax burden.