From education loan to paying rent to parents, 4 ways your family can help you save taxes
New Delhi | Jagran Business Desk: As a responsible citizen of the country, we must pay full taxes and on time. However, most of us are unaware of dual benefits from tax savings and are often dependent on deductions provided under Section 80C through investments like Employee Provident Fund (EPF). All such taxpayers must know that there are several ways like investing or gifting your family by which they can save taxes through certain deductions. So as the financial year 2020-2021 comes to an end, here are four ways through which you can save taxes with the help of your family:
Make an investment on behalf of your family:
Business experts suggest that investing on behalf of the family can help people save taxes. They suggest that certain investments -- like PPF and mutual funds -- can be made in tax-free PPF or equity mutual funds if gains are less than Rs 1 lakh a year. It should be noted that the government has given a tax exemption on interest income of up to Rs 1,500 per child for up to two children under Section 10(32) on a savings account.
Taking a loan:
Taking a loan can also help you save taxes. If money given to your spouse is invested in a tax-free instrument like PPF then as per the rules interest income will be exempted.
Paying rent to parents:
You can also avail deductions by paying rent to your parents but certain documents like bank statements of pavements, rental agreement and intimation of housing society are required for them.
Education loan for children:
If you have taken an education loan for your children, then that will make you eligible for income deductions under Section 80E on repayment of interest for a period of up to eight years from the date of commencement of interest repayments.
Posted By: Aalok Sensharma