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Taxable money of any individual in India depends on various factors such as residential status, nature of income, marital status, etc. Even if you get married on the last day of the financial year, you will be considered as married, and accordingly, the tax rules will apply for the entire year.In India, there is no clause where couples can jointly file their taxes. However, couples can save a considerable amount of income by separately filing their returns. In addition, there are some benefits that allow you to increase tax savings through your spouse. Let us understand how:
- Indian income tax act allows you to claim deduction on education expenses incurred for two of your children. The deduction can be claimed for college, school, or university expenses. However, this will not be applicable for more than two of your children. In such a case, your spouse can claim a deduction for your third and fourth child.
- Section 80 D of Indian Income tax act allows an individual to claim tax benefits for medical insurance coverage. However, there are certain limits to the amount of money that can be claimed as a tax deduction. In case the husband and wife both are working, maximum benefits can be claimed under section 80 D.
- Section 80 C of Indian income tax act allows tax deduction on borrowed money i.e., home loan . The benefits are limited if claimed by a single person. However, if both husband and wife are joint owners of the house and co-borrowers of the loan amount, they can claim maximum benefits under this section.
- Tax benefits in respect of house properties can be claimed by a couple. At present, an individual is allowed to have a single property as self-occupied. And, if he owns an additional property, the owner will have to offer rent as per the taxation laws even if no rent is received from that property. In such a case, the additional property can be registered under the spouse’s name to save additional taxes.
Existing laws can be used to the maximum in order to claim benefits as a married couple. Tax burden can be reduced if you transfer some money in your spouse’s account as a Token of Appreciation. No tax amount is charged on the Token of Appreciation. To better understand your tax liabilities and how you can claim maximum benefits as a couple, it is best to consult a professional tax expert.
Why Do Married Couples File Taxes Separately?
Typically, the income earned by spouses are held in separate individual account. Hence, provisions for filing taxes together might not be applicable. Every person whose income is above the tax exemption limit is required to file an ITR. Therefore, it becomes crucial for married couples to file taxes separately.
How Should Married Couples File Their Income Tax Returns?
Most married couples earn income separately. Thus, they can file their income tax returns individually. Here are the steps to file ITR-
- Log on to the portal- ( www.incometaxindiaefiling.gov.in )
- Select the ‘Download’ option. Once you select the assessment year, you need to choose the correct ITR form . Salaried individuals need to select ITR-1.
- Download the Return Preparation Software. Enter the details from your Form 16.
- Compute tax payable. After that, you need to pay tax, and enter the challan details in the tax return. You can skip this step in case you don’t have any tax liability.
- Confirm the details. You need to generate the XML file.
- You can digitally sign the file. Skip this step if you don’t have a digital signature.
- You will receive a message that confirms successful e-filing.
- After that, the ITR verification form is generated. You can download this file.
- You can e-verify the return via any of these methods- bank ATM, bank account number, registered mobile number and e-mail ID, Aadhaar OTP, and demat account number.
What are The Tax Benefit to Filing Taxes Jointly?
There isn’t any clause where married couples can file their taxes jointly. However, you can increase tax benefits with your spouse-
- The education expenses incurred for two of your children can be claimed as a deduction. However, this deduction can’t be claimed for more than two children. If you have more than two children, then your spouse can be eligible for a deduction for those children.
- You can claim a tax deduction on the money you’ve borrowed, such as a home loan, under Section 80C. However, this tax benefit will be limited if claimed by one individual. But if the spouses are co-borrowers of the home loan, then they can both claim tax deductions under this Section.
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FAQS - FREQUENTLY ASKED QUESTIONS
What are the Income Tax rules for married couples in India ?
In India, there are no specific income tax rules for married couples. Both spouses are treated as separate individuals for income tax purposes, and each must file their income tax return separately. Here are some important points to make a note of:
Filing Status: Married couples must file their income tax returns separately as individuals. There is no provision for the joint filing of income tax returns.
Tax Slabs: Each spouse will be taxed according to their own income tax slab based on their individual income levels. In India, there are two tax regimes available for individuals: the existing tax regime and the new tax regime. The existing tax regime is the one that has been in place for several years, while the new tax regime was introduced in the financial year 2020-21 with the aim of simplifying the tax structure and reducing the tax burden on taxpayers.
It is up to the individual taxpayer to decide whether to opt for the existing tax regime or the new tax regime. The choice will depend on their income level, deductions, and tax planning requirements.
Deductions: Each spouse can claim deductions available under various sections of the Income Tax Act individually. For example, Section 80C offers deductions for contributions to the Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity Linked Savings Scheme (ELSS), and National Pension Scheme (NPS), among other options. Other deductions can be claimed under Section 80D for medical insurance premiums and Section 80G for charitable contributions.
How much tax is free for married couples filing their returns jointly ?
In India, there is no provision for married couples to file their income tax returns jointly. Each spouse is required to file their own income tax return separately, and their taxable income is assessed separately. Therefore, the tax-free limit for married couples filing their returns jointly is not applicable in India.
However, there are certain deductions and exemptions available to individual taxpayers, which can help to reduce their overall tax liability. These include:
Basic Exemption: The basic exemption limit for individual taxpayers is Rs. 2.5 lakh per annum. This means that the first Rs. 2.5 lakh of an individual's income is exempt from tax.
Standard Deduction: A standard deduction of Rs. 50,000 is available to all salaried taxpayers.
Deductions under Section 80C: Taxpayers can claim deductions of up to Rs. 1.5 lakh under Section 80C if they invest in these specific instruments such as Provident Fund, Public Provident Fund, National Savings Certificates, etc.
Deductions under Section 80D: Taxpayers can claim deductions of up to Rs. 50,000/25000 under Section 80D for payments made towards health insurance premiums.
Deductions under Section 80TTA: Taxpayers can claim deductions of up to Rs. 10,000 under Section 80TTA for interest earned on savings accounts.
Deductions under Section 80G: Taxpayers can claim deductions for donations made to specified charitable organizations under Section 80G.
It is important for taxpayers to carefully assess their income and deductions to determine their overall tax liability and take advantage of any applicable deductions and exemptions. It is also advisable to consult with a qualified tax professional to ensure compliance with all applicable tax laws and regulations.
Can a wife get the ITR of her husband ?
As per the current Income Tax Act in India, a wife cannot directly get the Income Tax Return (ITR) of her husband without proper authorization. The Income Tax Act treats each individual taxpayer as a separate entity, and their income tax returns are confidential documents.
However, there are certain circumstances where a wife can obtain her husband's ITR:
Power of Attorney: If the husband authorizes his wife by giving her a Power of Attorney (POA), she can obtain his ITR.
Legal Heir Certificate: In case of the husband's demise, the wife can obtain a legal heir certificate from a court of law and use it to obtain her husband's ITR.
Mutual Consent: If both husband and wife give their mutual consent for the wife to obtain the husband's ITR, then she can get it.
Joint Account: If the husband and wife have a joint account and the ITR refund is to be credited to the joint account, then the wife can get the ITR.
However, it is important to note that obtaining someone else's ITR without proper authorization is illegal and can result in legal consequences. The Income Tax Act takes the confidentiality of tax returns very seriously, and taxpayers must ensure that their returns are kept confidential and secure.
In conclusion, a wife can obtain her husband's ITR only under specific circumstances and with proper authorization. It is always advisable to follow the procedures as per the Income Tax Act to avoid any legal issues.
How married couples can reduce their tax liability ?
Married couples can reduce their taxes by taking advantage of various tax deductions and exemptions available under the Indian Income Tax Act. Some of the ways in which married couples can reduce their taxes are:
Invest in tax-saving instruments: Both spouses can invest in tax-saving instruments such as Public Provident Fund (PPF), National Pension System (NPS), and Equity-Linked Saving Scheme (ELSS) to reduce their tax liability. Under Section 80C of the Income Tax Act, an individual can claim a deduction of up to Rs. 1.5 lakhs by investing in these instruments.
Claim deductions for medical expenses: Both spouses can claim deductions under Section 80D for medical expenses incurred on a self, spouse, and dependent children. A maximum deduction of Rs. 25,000 can be claimed for medical expenses, which can be increased to Rs. 50,000 for senior citizens.
Claim deductions for home loan: If the couple has taken a home loan, they can claim deductions on the interest paid on the loan under Section 24(b) of the Income Tax Act. A maximum deduction of Rs. 2 lakhs can be claimed in a financial year.
Joint Home Loan: A married couple can opt for a joint home loan to avail tax benefits on interest paid, principal repaid, and also get a higher loan amount.
Claim deductions for donations: Both spouses can claim deductions under Section 80G for donations made to charitable organizations.
Salary Restructuring: Married couples can take advantage of salary restructuring and opt for various tax-saving allowances like LTA, HRA, etc. to reduce their tax liability.
What does happen if I am married and file separate returns ?
In India, there is no provision for married couples to file their income tax returns jointly. Each spouse is required to file their tax return separately, and they will be assessed individually on their respective incomes.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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