If you are a salaried person or self-employed, the filing of your taxes would be a very stressful time for you. Most of you must be taking expert help for doing this and thus leading to saving some tax in the manner. Financial consultant in bilaspur will help you to give appropriate advice on how you save your taxes with the help of your parents.
It is an important factor to make planning to reduce taxes is a critically essential part of the overall financial planning process. A good financial consultant assists you in choosing the appropriate investment plans to save the taxes you pay throughout the lifetime, you will be able to plan your current and future money flows as well.
There are several ways to save income tax, one of the steps where I have not touched the part is about how parents assisting in saving income tax for their children. There are a few steps where your parents support you to save income tax. I feel you can use them efficiently to keep income tax as per IT Act.It is most important to understanding how Senior Citizens are taxed would assist their children to claim maximum tax advantage.
Every citizen of India relishes the exemption limit in tax, which indicates that if your income is within those limits, you require not to pay income tax. For senior citizens, whose age is 60 years and above for them the limit is Rs.3,00,000 and for super senior citizens whose age is 80 and above for them the limit is Rs. 5,00,000.
There are some several excellent ways in which financial consultant guides you about how your parents can save income tax for you:
Gift the amount to your parents or spend in their name: If a person is having extra profit to spend other than his/her name, he/she can gift that income to his parents. According to the Indian law of taxation, a person can gift money to his parents, which is tax-free and this gift is limitless also. This money can be in the form of money, cheque, ornaments, or fixed property like land, flat, etc. Properties or all the income kept in your name may increase his tax liability and even bring him into the higher tax bracket. This way, your income can be varied. This can further can be appropriated in investments of higher returns such as senior citizen saving scheme.
For example, if your mother or father are senior citizens having no income under their name, so you can spend up to Rs. 30,00,000 in each of their names if the annual return is 10%. That indicates you can spend up to Rs. 60,00,000 in the name of both your mother and father and the interest so received annually is tax-free.
Pay Rent to Your Parents: If you stay in your parent’s house that means the house is on either your mother/father or jointly held by them you can pay the rent. It’s a perfectly agreeable transaction by the Income-tax department. The rent you give to your parents would be added to their income as rental income and taxed according to their tax slabs.
If your parents are retired and do not have any taxable income, this rental income could be tax-free in their support depending upon the rent you agree to pay.
The deal gets even more beneficial if the property is combined registered on both of your parent’s names as the income from rent would be divided between both of them.
Invest in parents’s name: There are two conditions should be met so you can easily save tax with the help of your parents
- Your parents should be spending tax that is in a lower tax slab than yours
- Since cash is involved, there should be adequate assurance and understanding between you and your parents so that the money can be transferred/ spent the way you plan
Basically, you can gift cash to your parents and it’s not payable in their hands. So your parents can spend the gifted cash from their account. Since they are in a lower tax slab than you, they would spend lesser taxes and saving taxes for you.
If your parents are senior citizens then you might also profit from the extra interest that banks offer on such Fixed deposit
Though the amount appears short in the example but in the long run and on higher amounts the tax profit would be considerable.
Likewise, all investments whose returns are taxed on a marginal tax rate can be made on your parent’s name.
- Fixed Deposit in Banks, Companies
- NCDs, Bonds
- Debt Funds/ Stocks spent for less than 1 Year which makes short term capital gains and is taxed on the marginal rate of interest
In this way, if you are worried that how to make about financial or tax planning so don’t panic financial consultant in bilaspur will guide you in explaining the concept of how your tax liability can be saved with the help of your parents. For more information you can visit our website : https://www.surezindagi.com