Saving on income tax is a goal for many families, and the financial partnership between husband and wife can be a great asset in this regard. While marriage is deeply emotional, it can also be a source of financial collaboration. By making strategic financial decisions together, couples can not only boost their savings but also benefit from tax exemptions. If you’re looking to reduce your income tax burden, here are three solid strategies where your wife’s involvement can help save up to Rs 7 lakh in taxes.
Read More: Advance tax: Pay your second installment by September 15 to avoid penalties
1. Take an Education Loan in Your Wife’s Name
Many couples are supportive of their wives pursuing higher education. If your wife is planning to further her studies, consider taking an education loan in her name. The interest paid on this loan is eligible for tax exemption under Section 80E of the Income Tax Act for up to 8 years. However, it’s important that the loan is taken from a government-recognized bank or institution. This exemption only applies to the interest portion of the loan, making it a smart way to reduce taxable income while supporting your wife’s education.
Read More: Why have TCS employees received tax demand notices, and what to do if you get one
2. Invest in the Stock Market in Your Wife’s Name
Investing in the stock market offers great opportunities for long-term wealth creation, and it can also help with tax savings. Long-term capital gains (LTCG) up to Rs 1 lakh are tax-free. If your wife’s income is low or she is a homemaker, you can give her money to invest in stocks in her name. This way, the capital gains on her investments up to Rs 1 lakh will be tax-exempt. Additionally, if you have already exhausted your Rs 1 lakh LTCG exemption, your wife’s separate exemption can help you avoid paying taxes on an additional Rs 1 lakh.
3. Save Tax with a Joint Home Loan
Many couples plan to buy a home after marriage, and taking a joint home loan can provide significant tax benefits. If you take the loan and register the property in both your names, you and your wife can both claim tax deductions. Under Section 80C, both of you can claim up to Rs 1.5 lakh each on the principal amount, totaling Rs 3 lakh. Under Section 24, you can each claim Rs 2 lakh on the interest paid, which adds up to a total tax benefit of Rs 7 lakh. The exact savings will depend on the size of the loan and your respective incomes, but this is a powerful way to reduce your tax burden while building an asset.
By applying these three strategies, you can maximize tax savings for your household, making the most of the financial partnership between you and your wife.
