no matter how much we fight with our family members at the end of the day we sure love them sh helped me in many situations like being the best wing woman ever helping hide some questionable stuff from my parents and much more but did you know family can not only save you from your niba nibi problems they can also save you from a lot of money problems but why involve family in business it's a recipe for disaster because only 21% of women work in India and what does it imply most families depend on a single bread winner if that is the case a family collectively needs to utilize all the possible ways to save more money now even if both niba and nibi are earning there are some tax saving hacks that can help you save money in the long run that is why you need to watch this video where we talk about how to plan your finances in collaboration with your family members irrespective of whether you like them or not throughout our lives our parents help us in so many ways that cannot be put into words and surprise surprise there's one more way they can senior citizens and super senior citizens have a basic exemption limit of three lakhs and 5 lakhs respectively and you have a basic exemption limit of 2. 5 lakhs only so if you combine the tax liability for both you and your parent can substantially reduce the taxable income if you plan properly yeah don't make those confused faces of course I'm going to explain the concept to you with the detailed example but before that let's first understand that senior citizens have other tax benefits too section 80 dtb is specifically made for senior citizens under this section they can get a reduction of up to 50,000 Rupees for interest earned on savings and deposit accounts in their name like savings account and deposit accounts with banks Co operative Societies or post offices also Banks provide 5% more interest if the depositor is a senior citizen now assuming that you're the rich guy in the 30% tax lab just like me and your parents are nowhere near the same tax bracket as you are you can simply start investing in their name instead of yours so in this way the interest will be accumulated in their name not yours and you won't have to pay the taxes at a whooping 30% elaborate on the same here's the table for you to understand better here's the simple map you have 10 lakh Rupees you can invest them in your name or your mother's or your father's name FD rate of interest is 6% for you but is 6 and 1 12% for senior citizens and super senior citizens so while you get only 60,000 Rupees as interest income your parents get 65,000 rupees taxation wise at 30% tax bracket your taxes are at a whopping 18,000 rupes for them even they have the same income they fall under the 5% bracket and taxes are only 750 rupe that's like a pizza's price so as a family you just saved 17,250 rup now you can buy those new Nike sneakers that you were eying but wait there's more if you buy a health insurance cover for them you can get additional tax benefits for example if you pay for their health insurance premium section 80d provides for a deduction of 25,000 rupees and 50,000 Rupees for your parents who are aged below 60 and above 60 [Music] respectively for example suppose both of them are senior citizens and their combined premium is 43,000 rupees which you paid from your own pocket now since this is within the 50,000 Rupees limit you can claim that entire 43,000 rupees as a deduction while filing your taxes also according to section 80 ddb medical expenses incurred up to rupees 1 lakh for the treatment of a senior citizen parent or up to 40,000 rupees If the parents are aged below 60 for specified illnesses are tax deductible so if your parents are dependent on you and are suffering from some chronic illnesses specified in the law such as dementia cancer and Parkinson's disease try to get a certificate from that treating doctor explaining the severe it of the illness apart from your parents you can also use this section in case of a dependent sibling spouse or child now let's talk about H now even though you stay with your parents there is a secret hack where you can save taxes on that many of you may be aware of the fact that you can pay rent to your parents if you stay in your home while working and claim that H but that rent is still taxable in their hands now they can use section 24 to claim a reduction of 30% percentage of their annual rental income as repair and maintenance expenses so basically you save money using H allowance they get rental income but in most cases they would fall under the lower tax bracket than you probably 5% or 10% or 20% so they pay lesser taxes on this rental income all of this will combined save you a lot of money but Sharon I'm not a salary person I'm a freelancer and how can you become a fulltime free Lancer or a business owner what should I do don't worry I got you there is another area where your parents can save you up to 18,000 rupees a year now suppose your family or the HF of which you're a member does not own any house in your city and you stay at your parents house then you can make a rental agreement with your homeowner parent and pay them rent you can claim this rent as paid as deduction under Section 80 g one caveat though friends suppose you own a residential property any anywhere in India your income from that property is calculated as per the applicable income tax sections that means if it is being treated as a self-occupied property for tax purposes then you can't use the at section but suppose this is not the case you're still young and saving up for the down payment of your first home then living with your parents and claiming atgg is a great option let me illustrate this further with an example suppose you're an independent wedding planner you obviously don't have an opportunity to claim hedar you earn say an average of 36 lakhs per year after availing business related expense deductions and other tax benefits you are left with 9 lakhs of taxable income now if you effectively use section 0 g your taxable income will further reduce to 8. 4 lakhs as for the existing tax Labs at 30% rate you can save 18,000 in taxes next is saving money through siblings talking about siblings if you receive any monetary gifts from your siblings they are tax exempt for you without any upper threshold that's why anytime I want something I just bully him into gifting it to me in the absence of your parents if you are acting as a legal guardian to your siblings you have an opportunity to save taxes you can claim their education loan tax benefits under section at being a co- applicant suppose you are the legal guardian for your younger brother he is very bright and is selected at Columbia University being a premier Institute his education will cost lacks of rupees he will eventually move abroad every middle class household dream now suppose after the course completion he's overseas well placed and happy he can't take the El tax benefits because those benefits are provided by the Indian government not the US and in India he has no income from which he can claim this deduction but you being a co- applicant in his his El can pay the emis and claim the related tax benefits for 8 years now suppose in other case they are in your hometown pursuing higher studies and you are in Mumbai for example if your siblings are dependent upon you financially and travel to your city to meet you you can use your leave travel allowance to fund their travel as well also as we already discussed benefits under Section 80dd and section 80 D DB both can be availed for your dependent siblings now one more hack if your siblings are studying they can Avail a student discount at a lot of merchants so you can ask your colleg going younger brother or sister to buy such stuff for you hey now go buy me that iPhone go now that my sister has stopped bullying me let me tell you about saving money with your niba or nibi a house is probably the biggest joint expense we undertake getting a joint home loan allows you to get several tax benefits first of all benefits under Section 8C and section 24b can be utilized by both spouses by contributing towards the Emi so this way double tax savings can be achieved from your combined income here's the illustration for a house that must be completed within 5 years of loan commencement but if the home is not complete within 5 years the section 24b benefit reduces to just 30,000 rupees perom so basically if both niba and nibi pay emis jointly then you guys can claim a bind deduction of around 7 lakhs at 30% tax bracket this saves you 2.
1 lakh in taxes per year also if you are on a budget and are first time borrowers with a property value of up to 45 lakhs then you can claim an additional deduction of 1. 5 lakh each for the interest paid after fully using the section 24 deductions this benefit is available under Section 8ea additionally women typically get concessional rate rates on home loans and stamp Duty payments like in Mumbai women get around one person's concession on stamp Duty payment one more tip similar to your own education loan your ni's education loan can also save you money for 8 years if you Avail it as a co- applicant and benefits under Section 80 DD and section 80 ddb both can be claimed too if applicable to your niba or nii guys we have seen how costly it is to raise children these days wait wait wait I am not against children but it is good to know what benefits government provides you and your children in case of major children who are still learning and have not started earning a sizable income you can make investments in their name since they are broke and won't have much of a tax burden and since clubbing Provisions do not apply this can ensure a good amount of tax for example a mother invests rupees 1 lakh in an F in a daughter's name as a gift one year later the daughter gets 1 lak1 ,000 rupes from this investment if this money was in the mother's name she was required to pay taxes on rupes 10,000 earned but the daughter does not have a sizable other income maybe just a paid internship so rupes 10,000 at her hands do not attract any tax liability this will help them save up money for their higher education or other expenses this will also help your child to form a habit to look after their Investments properly you may even ask them to handle Petty household expenses like made security salaries food expenses Etc additionally section 80dd and 80ddb benefits can be claimed as per relevant circumstances for children as well now if you are fed up of your annoying children send them abroad this will help you mentally also and financially too suppose your child needs an education loan you can be a co- applicant in her El education loan repayment tax benefits under Section 80e are then available to you also this Arrangement is extremely useful since she won't be having a sizable income from Indian sources to claim a deduction from instead you can claim the deduction and save taxes I have another lessonn tip for you if you are falling short to fill up your 1. 5 La deduction under Section 8C you can claim money spent on your child's tution fees so for example you have spent rupe 60,000 as tution fees to your son's college you have only been able to contribute one lakh rupees under ATC Investments That year so out of these 60,000 you can claim a deduction for rupees 50,000 this saves you 15,000 in taxes if you fall in the 30% tax bracket the deduction is available for any two children so if you need plan and spend your children's fees after Consulting with your spouse this can help you both optimally utilize the tax Provisions now let us have a look at HF that is Hindu undivided family Hindu undivided family is a separate tax entity that means it has a separate pan card and it returns that need to be filed separately this is as if having all the immediate family members under one umbrella earning together and sharing all the resources Huf as tax benefits on the notional rent too so what is notional rent it is the rent that the government presumes you earn from your property irrespective of whether you really earn it or not HF can own two additional properties without considering this notional rent part it is also eligible to Avail home loan and claim tax reductions as per law under Section 8C 24b ATD and atdd 80ddb and so on for the Investments and Loans undertaken HFS can engage in businesses and spend for its members get tax benefits for example life for health insurance premiums and tution fees for the members this means if you form an HF tax deductions that you could not have utilized otherwise due to reduction limits given by the income tax department can now be claimed effectively through HF accounts for example let's say you invested in the public Provident fund account of rupees 1.
