Income Tax Savings Tips: Every taxpayer aims to lessen the impact of income tax on themselves. To lower their tax burden, taxpayers utilize various investment choices. Your parents can assist you with saving on taxes. There are 4 methods by which tax savings can be achieved via parents.
Follow the process to save income tax
When acquiring a home loan, borrowers can claim a deduction of up to Rs 2 lakh annually on the interest payment of the loan under section 24b of the Income Tax Act. Conversely, under section 80C, one can claim a deduction of up to Rs 1.5 lakh annually on the principal amount. If the taxpayer has obtained a home loan together with their mother or father/mother-father, then each individual taking the loan can benefit from these tax advantages independently. Nonetheless, it is important to remember that the co-applicant can benefit from the tax exemption only if he is also a joint owner of the property. If both are owners in addition to the co-applicant, only then can they individually access the tax benefits.
Besides the tax deduction offered under section 80C, an individual or HUF can claim a tax deduction of up to Rs 25,000 (Rs 50,000 for senior citizens) on premiums paid for medical insurance for themselves, their spouse, and dependent children under section 80D. Beyond this threshold, if the taxpayer is responsible for the medical insurance premium and/or medical expenses for parents who are under 60 years old, they will receive an extra tax deduction of Rs 25,000 (or Rs 50,000 if the parents are over 60 years old, classified as senior citizens). In addition to this, a taxpayer can also claim Rs 5,000 for costs related to preventive health check-ups under section 80D, but it will fall within the aforementioned expenditure limit.
If you reside in your parents’ home, you may pay them rent for tax benefits. HRA exemption benefit allows for the utilization of tax deduction.
To save tax, you can take the help of investment for your parents. You can open an account in the name of your parents under Fixed Deposit, Senior Citizen Savings Account, Savings Account or any other deposit scheme.