new Delhi. The service of parents has been considered as the biggest religion in us. Surely it is the duty of every human being to serve the parents. We also have a saying here ‘Karega Sewa To Milegi Mewa’. This is not just a proverb. The Income Tax Department also says that the tax exemption can be availed on the expenses incurred on the service of the parents.
The financial year is towards its last stop. Most of us are busy in fixing our books and accounts. People invest in different schemes to save tax. There are many ways to save in tax, by adopting which you can save tax as well as increase your savings and investments. You can get exemption on the basis of items like public provident fund (PPF), insurance policy, home loan and rent.
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Apart from these, there are some other ways, with the help of which you can save tax. In this, you can take advantage of tax exemption by investing in some insurance plans or savings schemes in the name of parents. These methods are helpful for those people whose parents are outside the tax net or their income is less than the taxable income.
Gift to Parents
You can give your taxable income as a gift to your parents. You can invest in his name. The basic tax exemption limit for senior citizens is Rs 3 lakh, while citizens of age 80 years and above come out of the tax net on income up to Rs 5 lakh.
Interest up to Rs 50,000 earned on bank or post office deposits is exempt from tax for senior citizens. Even if the income of your parents is more than the basic exemption limit, you can still avail tax exemption by making investments in their names as per their tax slabs. Cash gift received by parents from their child is tax free. And the income earned from such investment will not be added to the taxable income.
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Health Insurance for Parents
You can buy a health policy for your parents. Under Section 80D of Income Tax, a deduction of Rs 25,000 on health insurance can be claimed if the parents are within 60 years of age. If the parents are above 60 years of age, the tax exemption limit is Rs 50,000. The special thing is that this exemption in tax is different from the limit of Rs 25,000 under section 80D. Under section 80D, you can take advantage of tax exemption on health insurance for your own family.
Claim HRA by paying rent to Parents
If you are a salaried employee, you can save tax by paying rent to your parents. Keep in mind that the property should be in the name of the parents. In this way you can avail tax exemption on rental basis.
Handicapped Parent Relief
You can claim income tax for the expenses incurred on the disabled parents. Under Section 80DD of Income Tax, if someone’s parents are disabled, then that person can take exemption in income tax. Up to 40 percent disabled parents get the benefit of tax exemption on expenditure up to Rs 75,000. If there are two brothers in the family, both are spending on their parents, then it will be seen that how much is your expenditure. If both the brothers spend 75-75 thousand rupees, then both the brothers can claim exemption in income tax.
Tags: income tax, income tax slabs, Tax savings
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