- The main advantage of taking a joint home loan is that both the partners can avail of the benefits of Section 80C and Section 24 on loan principal and interest payment
- Under Section 80D of the Income Tax Act, one qualifies for a tax deduction of up to Rs 25,000, on the amount paid as a premium for health insurance
New Delhi: The most common problem of the salaried class is to find out ways to reduce tax liability. Nowadays, since both husband and wife are earning, they can share their expenses. For instance, both can contribute towards paying the EMIs of the home loan or car loan. There are many ways in which your spouse can help you save taxes.
With the rising cost of living, taking a joint home loan, availing of joint life insurance and health insurance can help to reduce the tax burden.
1. Joint home loan- The main advantage of taking a joint home loan is that both the partners can avail of the benefits of Section 80C and Section 24 on loan principal and interest payment. Under Section 24 (b), individuals are allowed for deductions up to Rs 2 lakh on payments for a self-occupied home. If the couples have borrowed in a 50:50 ratio then this limit is up to Rs 4 lakh. However, under Section 80C of the income tax, a couple can Rs 1.5 lakh each on the loan principal.
2. Use Leave Travel Allowance (LTA) exemption– In case, both the partners are eligible for LTA, then both can claim it individually. It is important to note that LTA cannot be claimed every year, meaning, one can claim it twice in a block of four years. The block starts on January 1 and ends on December 31 of the year.
3. Joint life insurance- In case of joint life insurance, one can claim a tax deduction on the premium paid for his or her spouse’s policy under Section 80C of the Income Tax Act. The maximum limit up to which it can be claimed is Rs 1.5 lakh. The main advantage of joint life insurance is that the premium on joint plans is lower than individual plans. Also, one can avail of higher tax deductions as well.
4. Health insurance for the spouse– Under Section 80D of the Income Tax Act, one qualifies for a tax deduction of up to Rs 25,000, on the amount paid as a premium for health insurance. Also, higher tax deduction can be claimed by paying the premium for the health insurance policy of your spouse and then clubbing it in your expenses.