Does a housewife have to file taxes?

Last Updated at: March 20, 2020
287
Does a housewife have to file taxes_

This post was written by Sanjay Muthukumar

 

It’s simple! It will depend on her income. If your housewife didn’t have any source of income like her income, rental income, interest from Fixed Deposits (FD), Mutual Funds, or Nil investments, etc. then she is exempted from tax filing.

If a housewife has income more than the limit, prescribed by the government, she needs to file an income tax. 

Taxable Income Range (In Rs.)

Tax Rate before Budget 2020 (Existing)

Tax Rate Post Budget 2020

0-2.5 lakh Exempted Exempted
2.5-5 lakh 5% 5%
5-7.5 lakh 20% 10%
7.5-10 lakh 20% 15%
10-12.5 lakh 30% 20%
12.5-15 lakh 30% 25%
Above 15 lakh 30% 30%

Points to Note:

  • Either housewife or any person must file the tax return depending upon the income earned during the financial year. 
  • If the individual aged below 60 years, earning less than Rs 2.5 lakhs are exempted from tax filing.
  • Similarly, the tax exemption limit for an individual above 60 years is Rs 3 lakhs and above 80 years is Rs 5 lakhs.

Income Received from Other Sources

Sometimes, housewives receive money from different sources but they don’t know which particular source of money must be treated as her income or not. The clarity will be given from the following cases.

Money received from husband account to wife account for household expenses:

  • The money received like this will not be treated as her income.
  • If the housewife obtains a sum of money from her husband’s account to her account for household expenses, will not consider it as her income.

Money received from husband’s income and invested in housewife name:

  • In this scenario, the income from these investments will not be treated as a wife’s income rather it will be considered as a husband’s income.
  • The income earned from the investments will be clubbed with the income of the husband and will be taxed in his name.
  • Further, if the income earned from the investment is re-invested, any profit, gain, or any income out of it will be considered as income of the wife and will be taxable under her hands.

Example 1, the husband has given Rs 5 lakhs to his wife for investment, which has generated an interest income of Rs 1 lakh. Now, this Rs 1 lakh will be clubbed with the income of her husband and taxed under him.    

Example 2, if the interest income Rs 1 lakh is re-invested, then income arising out of it will be taxed under the housewife.

File your income tax now

Interest from Fixed Deposits (FD):

  • If the interest earned by the housewife for the year is beyond the exemption limit, then it will be considered as income of her and taxed under the hands of the housewife only.
  • According to the income tax act, 1961, the interest from the FD is taxable as per the slab rate.
  • If the interest income from all FD is less than Rs 40,000 for a year, then the bank will not deduct the TDS.
  • Assume, if your interest income from all the FDs in the bank exceeds Rs 40,000 then 10% TDS will be deducted by the bank. If you failed to provide the PAN card details to the bank, then it will incur a 20% TDS deduction. So, make sure, you have submitted the PAN details to the bank. 
  • Similarly, it is important to note, that if your total income is less than Rs 2.5 lakhs (taxable limit), but the interest income is more than Rs 40,000, then No TDS is deductible.
  • So, if the housewife’s interest income is more than Rs 40,000, the bank can deduct TDS mistakenly. But the refund can be claimed by filing the ITR when the total income of her is below Rs 2.5 lakhs.

Gifts from relatives:

  •  The gifts obtained from the relatives are not taxable under the income tax act irrespective of any slab. I.e Quantum.
  • Here, the housewife is not necessary to file the ITR.
  • In case, if the gift is received from other than the relatives, there is a limit of Rs 50,000, beyond that will be included with the part of the total income.
  • While Compiling the gift and total income exceeds the prescribed limit, then the housewife has to pay the tax and must file the ITR.

Important points:

  • Any individual whose total income is less than the prescribed limit can still file an ITR called NIL Return.
  • If you forgot to submit Form 15H/G to the bank, the bank will deduct the TDS from the interest income of FD. But this can be refunded once you file your ITR.


Frequently Asked Questions

  1. Are liabilities for an income tax different for women?

Initially, there was a rebate on exemption limits for women. But since 2102-13, the difference has been abolished and tax rates are universal for both the male and the female.

  1. Is the due date for filing an income tax the same for every taxpayer?

No, the due date varies. The due date has been set on 31st July of the assessment year.

  1. Do group health insurance policies carry tax benefits?

No tax benefits are not available on group health insurance policies. 

 

0

Does a housewife have to file taxes?

287

This post was written by Sanjay Muthukumar

 

It’s simple! It will depend on her income. If your housewife didn’t have any source of income like her income, rental income, interest from Fixed Deposits (FD), Mutual Funds, or Nil investments, etc. then she is exempted from tax filing.

If a housewife has income more than the limit, prescribed by the government, she needs to file an income tax. 

Taxable Income Range (In Rs.)

Tax Rate before Budget 2020 (Existing)

Tax Rate Post Budget 2020

0-2.5 lakh Exempted Exempted
2.5-5 lakh 5% 5%
5-7.5 lakh 20% 10%
7.5-10 lakh 20% 15%
10-12.5 lakh 30% 20%
12.5-15 lakh 30% 25%
Above 15 lakh 30% 30%

Points to Note:

  • Either housewife or any person must file the tax return depending upon the income earned during the financial year. 
  • If the individual aged below 60 years, earning less than Rs 2.5 lakhs are exempted from tax filing.
  • Similarly, the tax exemption limit for an individual above 60 years is Rs 3 lakhs and above 80 years is Rs 5 lakhs.

Income Received from Other Sources

Sometimes, housewives receive money from different sources but they don’t know which particular source of money must be treated as her income or not. The clarity will be given from the following cases.

Money received from husband account to wife account for household expenses:

  • The money received like this will not be treated as her income.
  • If the housewife obtains a sum of money from her husband’s account to her account for household expenses, will not consider it as her income.

Money received from husband’s income and invested in housewife name:

  • In this scenario, the income from these investments will not be treated as a wife’s income rather it will be considered as a husband’s income.
  • The income earned from the investments will be clubbed with the income of the husband and will be taxed in his name.
  • Further, if the income earned from the investment is re-invested, any profit, gain, or any income out of it will be considered as income of the wife and will be taxable under her hands.

Example 1, the husband has given Rs 5 lakhs to his wife for investment, which has generated an interest income of Rs 1 lakh. Now, this Rs 1 lakh will be clubbed with the income of her husband and taxed under him.    

Example 2, if the interest income Rs 1 lakh is re-invested, then income arising out of it will be taxed under the housewife.

File your income tax now

Interest from Fixed Deposits (FD):

  • If the interest earned by the housewife for the year is beyond the exemption limit, then it will be considered as income of her and taxed under the hands of the housewife only.
  • According to the income tax act, 1961, the interest from the FD is taxable as per the slab rate.
  • If the interest income from all FD is less than Rs 40,000 for a year, then the bank will not deduct the TDS.
  • Assume, if your interest income from all the FDs in the bank exceeds Rs 40,000 then 10% TDS will be deducted by the bank. If you failed to provide the PAN card details to the bank, then it will incur a 20% TDS deduction. So, make sure, you have submitted the PAN details to the bank. 
  • Similarly, it is important to note, that if your total income is less than Rs 2.5 lakhs (taxable limit), but the interest income is more than Rs 40,000, then No TDS is deductible.
  • So, if the housewife’s interest income is more than Rs 40,000, the bank can deduct TDS mistakenly. But the refund can be claimed by filing the ITR when the total income of her is below Rs 2.5 lakhs.

Gifts from relatives:

  •  The gifts obtained from the relatives are not taxable under the income tax act irrespective of any slab. I.e Quantum.
  • Here, the housewife is not necessary to file the ITR.
  • In case, if the gift is received from other than the relatives, there is a limit of Rs 50,000, beyond that will be included with the part of the total income.
  • While Compiling the gift and total income exceeds the prescribed limit, then the housewife has to pay the tax and must file the ITR.

Important points:

  • Any individual whose total income is less than the prescribed limit can still file an ITR called NIL Return.
  • If you forgot to submit Form 15H/G to the bank, the bank will deduct the TDS from the interest income of FD. But this can be refunded once you file your ITR.


Frequently Asked Questions

  1. Are liabilities for an income tax different for women?

Initially, there was a rebate on exemption limits for women. But since 2102-13, the difference has been abolished and tax rates are universal for both the male and the female.

  1. Is the due date for filing an income tax the same for every taxpayer?

No, the due date varies. The due date has been set on 31st July of the assessment year.

  1. Do group health insurance policies carry tax benefits?

No tax benefits are not available on group health insurance policies. 

 

0

FAQs

No FAQs found

Add a Question


No Record Found
SHARE