Can Married Couples Save Taxes with Old & New Tax Regimes? Evaluate Tax Liability Based on Income and Deductions
Can a Married Couple Save More Taxes Using Both Old and New Tax Regime?
As the financial year comes to a close, married couples in India often find themselves pondering a crucial question: which tax regime should they choose to minimize their tax liability? With the introduction of the new tax regime, it’s essential to analyze both the old and new structures to see which one benefits you and your spouse the most.
Understanding the Tax Regimes
The old tax regime allows taxpayers to claim various deductions and exemptions, such as those under Section 80C, 80D, and more. On the other hand, the new tax regime offers lower tax rates but removes most deductions and exemptions. This creates a dilemma for many couples who need to evaluate their combined income and applicable deductions.
Evaluating Income Structures
Married couples should first assess their individual incomes and the deductions they can claim. For instance, if one spouse earns significantly more, it might be beneficial for them to opt for the old regime, capitalizing on deductions to lower their taxable income. Conversely, if both partners have relatively low incomes, the new regime’s lower tax rates might be more advantageous.
Utilizing Deductions Wisely
If you decide to stick with the old tax regime, ensure you’re maximizing your deductions. Contributions to Provident Fund (PF), National Pension Scheme (NPS), and health insurance premiums are just a few ways to reduce your taxable income. Married couples can also utilize tax-saving investments under Section 80C, which can lead to substantial savings.
Making the Right Choice
To determine which regime is optimal, consider running a comparative analysis of both scenarios. You can use tax calculators available online or consult a financial advisor for personalized advice.
Conclusion: The Power of Choice
Ultimately, the choice between the old and new tax regimes depends on your unique financial situation. By carefully evaluating income structures and available deductions, married couples can make informed decisions that lead to significant tax savings.
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