If you earn more than the limit, income tax (Income Tax) Begins to recover. At present the tax free limit is Rs 2.5 lakh per annum. Then taxable income up to Rs 5 lakh is taxed at 5%. After exceeding the limit of 2.5 lakhs, you try to save tax and there are various tax deduction provisions for this. According to tax experts, even with the help of your parents, tax savings can be made. In this article we will tell you some of these remedies. If your parents do not have taxable income, prepare an investment portfolio for them. After preparing the portfolio, make a gift for the parents, which will provide tax relief. Investments can be made in the name of parents in post office small savings plans, senior citizen savings plans and other types of tax savings plans.
More tax breaks for senior citizens
Tax exemption limit for senior citizens is Rs. 3 lakh and for super senior citizens Rs. 5 lakh. Senior citizens get a rebate of up to Rs 50,000 on interest income, while for the general public the limit is Rs 10,000. In that case, if you give a cash gift to your parents and they invest it in tax saving schemes, you will get a double tax benefit.
Parents can rent
If you work and live with your parents, you can give them rent that is in their name. You can claim HRA on this rent. If the parents’ own income is not taxable, they will not be liable for any tax on the rental income and that is like a tax saving plan for you. Parents can get a 30 percent deduction from rental income as maintenance if they wish. This benefit is available under Section 24. If the rental income is more than 1 lakh then their PAN is required.
Buy health insurance in the name of parents
You will also get tax relief if you buy health insurance in the name of your senior citizen parents. If the parents are senior citizens, the tax deduction will be 50 thousand rupees. If the age is less than 60 years then the benefit of 25 thousand will be deducted. This benefit is available under Section 80D.
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