Filing of IT Returns for Married Couples
While marriage is a holy union of two people and promises a blissful experience, it also comes with a number of responsibilities that require careful attention. One such responsibility of a married couple is the filing of income tax returns.
The filing status of a taxpayer for a particular fiscal year will be based on his/her marital status at the end of the financial year. Therefore, in case you tie the knot on the final day of a particular financial year, it will be considered as you have been married for the whole year.
After your wedding, there is the potential to save a good amount of money by filing two independent IT returns. The income earned by a person will be taxed depending upon several different factors, like residential status, quantum of income, nature of income, etc. It is important to note that joint filing is currently not a favourable concept in India. The income of spouses is taxed together only in case of special circumstances.
Usually, the income earned by each individual in a marriage will be maintained individually in different accounts. As a result, such provisions will not be applicable. Each individual who earns more than the maximum limit not chargeable to tax will be required to file income tax returns, making it essential to ensure that both accounts are maintained independently.
Couples are Better off Filing Their Returns Independently
If both spouses are employed and earning incomes, the husband and wife will have been paying their taxes even before marriage. It is advised that they continue doing the same even after marriage. While the wife can either adopt the husband's surname or proceed with her own, her PAN card details will remain the same.
However, the tax burden can be lowered if the husband transfers some money into his wife's account as a gift or token of appreciation, and amounts transferred in this manner will not be chargeable. The transfer of assets to siblings or parents are not applicable to clubbing provisions either, so investments in the parent's' name or income from gratuitous payments can also offer great tax benefits especially if they fall in a lower tax slab.
When a person receives an amount exceeding Rs.50,000, this amount will be chargeable to tax as 'Income from Other Sources'. However, if the money is given to an individual from a relative or as a wedding gift, it will not be chargeable to tax. It is important to note that friends do not qualify as relatives, so any amount transferred to an individual's account by a friend will be charged tax under 'Income from Other Sources' and the tax rates will be the same as the applicable slabs.
Simply put, couples who do not have any financial dependents can make the most of filing their taxes separately in case one of them earns a high income while the other has considerable deductions.
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