Filing Income Tax Returns (ITR) is crucial for everyone, including housewives. Even without direct income, housewives might have 'Income from Other Sources' such as interest from fixed deposits, rental income from owned properties, and more. If the total income from these sources surpasses the threshold set by the Indian government, a housewife must file her income tax return.
This article will cover various aspects of income tax for housewives, including deductions, eligibility, and income sources.
Income tax for housewives
Under the old tax regime for FY 2023-24, a housewife (aged below 60) earning less than Rs. 2.5 lakh is not subject to taxation. For those in the super senior citizen category (80 years and above), the minimum exemption limit is increased to Rs. 5 lakh.
In the new tax regime, the basic exemption limit is set at Rs. 3 lakh, below which there is no tax liability, irrespective of age.
Housewives will only need to pay taxes if their total income from various sources exceeds this basic exemption limit.
What are the sources of income for housewives?
Housewives may have a diversified source of income. Here are some common sources:
- Rental income: If a housewife owns a property and it is rented out, the rent collected becomes a source of income.
- Dividend income: If there are investments in shares and the company distributes dividend income, then that income is taxable and hence, should be included while filing ITR.
- Income from saving schemes and fixed deposits: The maturity amount or the interest income from fixed deposits or savings schemes is taxable under the head 'Income from other sources'.
- Capital gains: If a housewife is into buying and selling properties or stocks and she earns from such transactions, then gains from the sale of these assets are classified as 'Income from Capital Gains'.
- Agriculture income: Income from the agricultural activity, which is above Rs. 5000, is tax applicable.
- Income through home-based business: Some housewives may have a home-based business such as tutoring, catering, arts and crafts making, etc. The income from these activities should be declared while filing ITR.
- Gifts: Money received as gifts exceeding Rs. 50,000 is taxable unless received from certain relatives or on certain occasions like marriage.
- Pension: If the spouse has passed away, the monthly family pension that the housewife receives is taxable as 'Income from Other sources'.
- Income from investments: The income earned by the housewife from investments like mutual funds, bonds etc is taxable.
Remember, it's not just about how to file ITR for housewife, but it's also about understanding the different types of income that needs to be considered while filing the ITR. This ensures a comprehensive and proper tax filing.
Step-by-step guide to filing ITR for housewives
- Identify the source of your income: Before starting off with the ITR filing process, it's quintessential to understand from where your income is coming in. As a housewife, if you own a property and have rental income, or if you have invested in stocks and bonds and receive dividends, or if you have invested in some fixed deposits or savings schemes, the income earned from these should be considered while filing ITR.
- Understand the tax slabs: Tax slabs differ based on age, residential status and income. As a housewife, you need to check under which slab you fall. For instance, if your income is less than Rs. 2.5 lakh, you don’t have to pay any tax.
- Find out the right ITR form: Upon identifying your income source and understanding the tax slabs, you ought to choose the right ITR form. There are seven kinds of ITR forms available for different taxpayers.
- E-filing of ITR: Once you understand the form requirement, you can initiate the e-filing process. You need to register yourself on the Income Tax E-filing portal. Once registered, log in and choose the assessment year for which you are filing the return. Fill out the form with all the necessary details and click on 'submit' to upload the form.
- Cross-check TDS: You should cross-check the tax deducted at source (TDS) with Form 26AS to ensure that the correct amount has been deducted.
- Claim deductions: If you have taken a home loan, you can claim interest paid on the home loan under section 24 while principal repayment can be claimed under section 80C up to Rs 1.5 lakh in a financial year.
- Verification: After the ITR is filed, it needs to be verified either physically by mailing the signed ITR-V to the Income Tax Department, or electronically (e-verify) using an Electronic Verification Code (EVC) or an Aadhaar OTP.
- Refund status and notice: After verification, the tax department will process your ITR. If any discrepancy is found, you will receive a notice from the Income tax department. You can also check the refund status after the department has finished processing your ITR.
Now let's discuss how certain financial products can help in tax saving. Financial products like equity-linked saving schemes (ELSS), Public Provident Fund (PPF), National Savings Certificates (NSCs), and life insurance can give you deductions under Section 80C. Additionally, if you invest in health insurance, you can claim deductions under Section 80D.
In conclusion, understanding the basics of ITR filing can go a long way in ensuring correct and hassle-free tax filing. It helps maximise your tax-saving potential and ensures your financial independence and stability. Remember, tax laws frequently change, so it's crucial to stay updated with the latest information or consult a tax expert, if needed.
