5 Tax Saving Tips for Newly Married Couples
Newly married couples have a beautiful life ahead to share love, explore happiness and accomplish money goals. Every couple emerges with different desires such as planning for higher education, exploring the world on a long vacation, investing in purchasing assets, etc.
So, what is the most important aspect that forms the basis for accomplishing such goals? Well, don’t you think it is a well-defined financial plan? Well, yes! Financial planning is a great way to start. And, financial planning with tax*-saving investments at inception will be an added advantage.
So, here are a few tax-saving tips for newly married couples.
Life Insurance Plan – Purchasing a life insurance plan such as term insurance is great to utilise tax* benefits. A term policy offers the sum assured to your family members in case of your unexpected death. It is a much-needed effort required to safeguard your family in the wake of pandemic situations.
The Government of India encourages people to make such investments to increase their financial literacy and secure their family’s financial future by providing tax* benefits. Therefore, the premium amount you pay towards a term insurance plan qualifies for tax* deduction under Section 80C of the Income Tax Act, 1961, up to ₹1,50,000. And, the returns from the policy qualify for life insurance tax exemption under Section 10(10D).
Insurance providers have recognized such benefits and enhanced the product features to help people get maximum protection with customized solutions while saving tax. For instance, with the Tata AIA term plan online, you can get a comprehensive solution that provides a life cover and financial assistance to manage hospitalization and treatment expenses. You can use it for treatment on the diagnosis of a critical illness, total and permanent disability, etc., So, you and your spouse can get necessary financial assistance to manage an emergency while assuring life insurance tax* benefits.
Home loan – Investing in a home loan along with your spouse can prove to be a great advantage. You can increase loan eligibility chances and avail a higher loan amount, thereby increasing the tax* benefits.
The home loan tax benefits are as follows:
Deduction under Section 80C – You can avail a tax deduction benefit up to ₹1,50,000 from the taxable income for the amount spent on principal repayment.
Deduction under Section 24 – You can avail of tax deduction up to ₹2,00,000 for the interest amount payable.
Deduction under Section 80EE – Being a newly married couple, if you are a first-time homebuyer, you can claim an additional deduction of ₹50,000 on the interest amount payable. It is over and above the deduction under Section 24. However, to avail this benefit, the home loan should not be more than ₹35 Lakh, and the properties should not exceed ₹50 Lakh. The loan must be sanctioned must be between 01.04.2016 to 31.03.2017. The person applying for the loan should own any other house property.
Health insurance – Health insurance is another important aspect you need to consider after getting married. It makes way for handling any emergency consultations or medications for you, your spouse, and your dependent parents. Payments made towards purchasing a health insurance premium and preventive health check-ups qualify for tax deduction under Section 80D.
The medical expenditure incurred on your parents(senior citizens) also qualifies for a tax deduction if not covered under any health insurance policy. So, suppose your dependent parents’ have pre-existing illnesses or other ailments and find it difficult to accommodate paying their health insurance premium. In that case, you can avail of tax benefits based on this provision under Section 80D.
Retirement Plans – Well, retirement is a long way to go from your newly started married life. However, in the current lifestyle and changing global scenarios, people plan for early retirement to explore different life experiences with family based on a defined financial plan. Investing in retirement plans and annuity solutions is therefore considered beneficial. And, the government has extended its maximum support to such investments for tax*-saving benefits in the long term.
For instance, the payment done towards purchasing an annuity pension plan qualifies for tax deduction under Section 80CCC. In addition, you can also invest in Public Provident Fund, National Savings Certificate, Equity Linked Savings Scheme, etc., to increase your savings investment and prepare a huge corpus on retirement while benefiting from tax* deduction provisions under Section 80C. Also, a tax deduction is allowed if you and your employer contribute towards the National Pension Scheme under Section 80CCD.
Optimize benefits with the best salary structure – If you and your spouse are earning a handsome salary, you can use the different components of the salary provided by your employer to avail of additional tax benefits. House Rent Allowance (HRA), Leave Travel Allowance (LTA), Medical reimbursement are some of the options that you can consider while availing tax benefits.
For instance, if you have started your married life in rented accommodation, then the minimum of the following will be tax-exempt on HRA:
Actual HRA amount received
50% (metro city) or 40% (non-metro city) of basic salary
Total annual rent paid - 10% of salary.
While considering such options, you must choose the old regime income tax slab to get the tax deductions and exemptions applicable for increased benefits. On the other hand, the new tax regime provides lower rates but excludes various tax deductions and exemptions.
Newly married couples will have great plans to make their future exciting, peaceful and happy. They work on financial goals to satisfy their financial needs at different stages in life. It is important to note that financial planning can include investments that qualify for tax benefits. And, tax filing for newly married couples can bring in the best benefits when the investment opportunities are utilized optimally.
So, you can purchase a life insurance, health insurance for your family, a home with your spouse, retirement plans, and optimize your salary structure to the full potential to derive maximum protection, savings, and investment returns while saving on tax*.