The Income tax deduction at office and home leaving you penniless

Prime Minister Modi has recently announced recognising the honest income tax payer in India. The “Transparent Taxation – Honoring the Honest” platform will initiate major tax reforms aimed at bringing transparency in income tax systems therefore empowering taxpayers.

The income taxpayer is happy at getting such kind of recognition. But he is not only looking at recognition from the authorities but also from her highness at home. Salaried people feel thrilled the day salary is credited into their account. But the thrill is short-lived as 3/4^th of the salary has to be credited to spouse’s account.

Tax deducted at Source or TDS

TDS at office – The net salary that comes into the account after tax deducted at source or TDS.

TDS at home – The net salary that you are left with after tax deducted by the spouse at home.

The tax paid by the citizens is used by the government in the welfare of the state. Similarly, the tax collected by the spouse is used in the overall welfare of the family.

ITR – Income tax return

July is the month when one is supposed to file an Income tax return with the authorities. The return has to be filed accompanied by Form 16 issued by the organisation where you work. Form 16 is a certificate issued by your organisation stating the amount deducted from your salary and deposited with the Income tax authorities. Any attempt to hide the Income from the tax authorities can result in heavy penalties.

On the other hand, by the beginning of every month, you have to file an Income and tax statement with your spouse. This is a statement issued by your bank showing how much salary you earned and how much you transferred to your spouse. Any attempt to hide the Income from your spouse can result in your being thrown out of the house.

Standard deduction

While calculating tax, the government allows the salaried class to keep some money for themselves. It is called a standard deduction. Currently, it stands at Rs 50000 which means you can deduct this amount from your taxable income.

While calculating tax at home the spouse allows the overworked salaried husband to keep some money for himself. Called standard deduction this amount can be used by husband in meeting his petty expenses like buying cigarettes, on his office tea, buying lunch for team, or boozing with friends in pubs. This is an amount that the spouse will never question but any attempt to cross the limit entails a heavy fine by the spouse.

Mediclaim Insurance

The Income tax department allows a person to deduct Rs 25000 from the total income to secure their health by buying a medical insurance policy. The individual can buy a cover for his family and in case he wants to include his parents who are less than 60, he can claim an additional Rs 25000 amount.

At home, the wife uses a part of the salary on keeping herself and the family healthy. She uses the amount on her looks by buying grooming products, salon visits, and spa membership for glowing skin, investments in clothing to look younger, Gym, and yoga membership to keep physically fit. Even the kids are also covered under the policy with the same benefits. But the policy doesn’t cover the husband who is supposed to arrange his funds for the same treatment.

Deductions made under section 80C

The tax authorities allow taxpayers for certain expenditures and investments that are exempted from tax with a maximum deduction of Rs 1.50 lakh. This includes investments in EPF, PPF, Repayment of housing loan (principal amount), Life insurance premium, Tuition fees of two children, etc. As a result taxpayers use this benefit to invest in long term savings.

Even at home, the spouse allows for all these expenses but with no ceiling. Children’s education gets preference with school and tuition fees taking a major chunk. She encourages long term investments though not in mutual funds but in gold and diamonds that always fetch a good return in the long term. The biggest investment for the spouse along with her family is a home sweet home. A housing loan not only allows her to for a rebate but also makes her a joint owner with the husband in the property.

The Income Tax slabs

The Income tax slabs created by the authorities for calculating the tax liabilities are as follows:

Up to 5.00 lakh – Nil

5.00 – 7.50 lakh – 10%

7.50 – 10.00 lakh – 15%

10.00 – 12.50 – 20%

12.50 -15.00 lakh – 25%

15.00 lakh and above – 30%

The motto is “The more you earn the more you pay”.

The Income tax slabs created by a spouse for her husband are much simpler:

Up to 5.00 lakh -Husband gets nothing

5.00 – 10.00 lakh – He can keep 10% for himself

10.00 – 15.00 lakh – He gets 15%

15.00 lakh and above – He can keep a maximum of 20%

The motto is “The more you earn the more I get to spend” 

The Income tax refund

There are times when you have paid the authorities in excess of your liabilities and thus can claim the same by filing for a refund. This facility is not offered by the spouse and once you have made the payment just forget that you will get anything back. 

Making peace with authorities

You hate paying taxes but still pay it as it gives you peace of mind. Similarly, the feeling of losing the entire salary to your spouse is not a pleasant one but still, you pay it to keep peace at home.

PM Modi has launched a faceless tax system

PM Modi has recently announced making the tax system faceless with a promise of fairness and fearlessness.

The Government recognised AEH (Association of Exploited Husbands) questioned him if he can introduce a similar tax system at home. The husbands are being exploited badly by their spouses. They have to face a system that has a face that is unfair to them. As a result  it has created a fear regime at home with regular tax raids. Well, the answer was a big “No”. The secretary of the AEH remarked that the PM will never understand their plight as he is a bachelor to date.

(The last paragraph has to be read in humor).

To know more about Income tax you can visit the following site:https://www.incometaxindiaefiling.gov.in/home

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