Income Tax Saving: The last date of filing ITR (Income Tax Return) for assessment year 2020-21 has been extended till 31 December 2020 and for those whose accounts have not been audited, it is 31 January 2021. To save on income tax, people try to invest more and more under section 80C of IT Act. This includes sections 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (donation). There are some ways in which you can take help from your parents, spouse and children for saving income tax.
Children’s school fees
You can claim deduction up to Rs 1.5 lakh for tuition fees of your children under section 80C. You can take advantage of this on the payment of children’s school fees. It can be taken for up to two children. You can also take investment in Sukanya Samriddhi Yojana for up to two children under this section.
Health insurance for parents
You can save tax even after paying the health insurance premium for your spouse, children. In this, deduction up to Rs 25,000 can be taken under section 80D. You will also get additional deduction by paying the premium for the parents. If your parents are senior citizens, you can claim deduction up to Rs 50,000.
Education Loan for Children
For education loan taken for your children, you can claim tax deduction under section 80E. You can take education loan from the bank for the expenses of higher education of the child.
Pay rent to your parents
If you live in a parent’s house, you can pay the rent for tax deduction. Tax deduction can be availed as HRA exemption benefit. However, parents should own the house for this and you cannot partner with them. If you do not get HRA benefit, then you can claim for tax benefit under section 80GG.
Invest in your parents name
You can give some money to your parents for tax savings. You can open a fixed deposit in the name of your father and father. If they come in less tax slab than you, then the interest paid on FD will be less than you. If you open the same FD in your name, then you will have to pay more tax.