The taxation rules do not differentiate by gender or by marital status. It follows a simple rule, wherein when the income of an individual exceeds the minimum exemption limit, the individual is liable to pay the taxes.
Housewife Have to File Taxes: All women are working women, while only a few are salaried. So, when it comes to the filing of taxes does every woman have the need to file it? Forget about every woman, does a housewife have to file Income Tax Returns (ITR)? Although she works, she isn’t salaried. So, does the question even make any sense? Surprisingly, it does! Whether a housewife has to file the tax or not depends on a case-to-case basis. First things first, the most obvious fact to be noted is whether the housewife has a source of income. If she fails to have any such source of income as rental income, interest from Fixed Deposits (FD), Mutual Funds, or does not possess any investment, then she is exempted from tax filing. On the other hand, if the lady receives income that exceeds the limit prescribed by the government, she needs to file her income tax based on Classes Of Income Tax.
Income Tax Applicability Range
Income Tax Range for Women Below 60 Years of Age
|Up to ₹ 2,50,000
|₹ 2,50,001 to ₹ 5,00,000
|5% above ₹ 2,50,000
|₹ 5,00,001 to ₹ 7,50,000
|₹ 12,500 + 10% above ₹ 5,00,000
|₹ 7,50,001 to ₹ 10,00,000
|₹ 37,500 + 15% above ₹ 7,50,000
|₹ 10,00,001 to ₹ 12,50,000
|₹ 75,000 + 20% above ₹10,00,000
|₹ 12,50,001 to ₹15,00,000
|₹ 1,25,000 + 25% above ₹ 12,50,000
|Above ₹ 15,00,000
|₹ 1,87,500 + 30% above ₹15,00,000
Income Tax Range for Women Above 60 Years of Age
|Up to ₹ 2,50,000
|₹ 2,50,001 to ₹ 3,00,000
|5% above ₹ 2,50,000
|Rs 3,00,001 to Rs 5,00,000
|5% above ₹ 2,50,000
|Rs 5,00,001 to Rs 7,00,000
|Rs 12,500 + 10% above Rs 5,00,000
|Rs 7,50,001 to Rs 10,50,000
|Rs 37,500 + 15% above Rs 7,50,000
|Rs 10,00,001 to Rs 12,50,000
|Rs 75,000 + 20% above Rs 10,00,000
|Rs 12,50,000 to Rs 15,00,000
|Rs 1,25,000 + 25% above Rs 12,50,000
|Above Rs 15,00,000
|Rs 1,87,500 + 30% above Rs 15,00,000
Therefore, when the income of the housewife exceeds the above-stated slab, the ITR has to be filed. When the income is within ₹ 2.5 lakhs, in the case of women aged less than 60 years, the payment of tax is exempted. Similarly, the tax exemption limit for an individual above 60 years is ₹3 lakhs.
What Is Considered as Income for a Housewife?
Though housewives are not salaried, most of them often maintain a cash reserve for emergency usage or for their personal expenses. They do receive cash from multiple channels. But not all of them amount to “income”.
Learn more about Income Tax Benefits for Women
Money Received from Husband for Household Expenses
The money a woman receives from her husband for the purposes of running the household, cannot be considered income. The same holds true even if the money was transferred by the husband to her bank account.
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Money Received from Husband and Invested in her Name
In this case, when the money invested for the housewife is actually the husband’s money and it is treated as the husband’s income. Therefore, the tax corresponding to that amount is added to the husband’s taxes. On the other hand, if the wife earns any income out of the husband’s income, then it is taxable in the name of the wife.
For instance, if the husband has given ₹ 500,000 to his wife for investment, and it has generated an interest income of ₹ 1,00,000 lakh. The ₹ 100,000 will be clubbed with the income of her husband and taxed under his name. If the interest income of Rs 1 lakh is re-invested, then the income arising out of it will be taxed under the name of the housewife.
Interest from Fixed Deposits
Whether the interest amount from FD is taxable, literally depends on the interest amount that is generated. If the interest earned by the housewife in a given year is beyond the exemption limit, then the amount will be considered the housewife’s income. The Income Tax Act, of 1961 states that the interest amount derived out of FD is completely taxable as per the stipulated slab rates. Here, the FD interest is calculated as per the slab rates. However, if the interest income from all the Fixed Deposits is less than ₹40,000 for a year, then the bank will not deduct the TDS. Alternatively, if the income comes from all the existing sources, it would attract a 10% TDS (Tax Deduction at Source). The individual is required to submit various identity proofs such as the PAN card, failing on which a 20% GST will be be levied.
Also, if the total income is lesser than ₹250,000 which is the taxable income and the interest income is say, about 40,000, then TDS doesn’t apply. Therefore, if the interest gained by the housewife is more than ₹2000, the TDS may be deducted erroneously. In such cases, the housewife can claim the amount by filing the ITR based on different type of ITR when her total income is below ₹2.5 lakhs.
Regardless of the quantum of the amount, the gifts obtained from specified relatives are not taxable under the Income Tax Act, 1961, irrespective of any slab. Here to file the ITR for housewife is not required . In cases of gifts received from anyone other than the specified relatives, gifts exceeding a value of ₹50000 shall be considered as a part of the income of the housewife. If the gift amount along with the other income goes beyond the minimum exemption limit, the housewife shall have to pay the required taxes accordingly.
Filing ITR with Nil Returns
It might be a bright idea to file the ITR under the category of nil returns even when the annual income is below the exempted limit. This could help the individual in a variety of scenarios. For instance, it acts as the best proof of income and is expected by several financial institutions. This also comes in handy while making applications for loans. Nil returns are also filed as proof while applying for a visa to gain entry into foreign countries. Additionally, when tax has been deducted when the income of an individual is within the exempted limit erroneously, a refund can be claimed by filing the ITR and by being aware of the Income Tax demand notice.
Income Tax Deductions and Exemptions for Housewives
Understanding of income tax for housewife obligations and benefits is essential. This guide will shed light on the various tax deductions and exemptions that are pertinent to housewives for the financial year 2023-24.
- Standard Deduction: Housewives are entitled to claim a standard deduction of Rs. 50,000. Essentially, this allows them to reduce this amount from their aggregate income, making the subsequent taxable income lesser.
- Medical Expenses: Housewives have the provision to claim deductions for medical expenses. This includes costs incurred for themselves, their spouse, and their dependent children. For the year 2023-24, the upper limit for this deduction stands at Rs. 40,000.
- Charitable Contributions: For the philanthropic housewives, deductions can be availed for donations given to sanctioned charitable entities. The deduction amount is the lesser of 50% of their total income or Rs. 10,000.
- Home Loan Interest: If a housewife has availed a home loan for the acquisition or construction of a self-residing property, she can claim a deduction on the interest component of the loan. The maximum deduction for 2023-24 is capped at Rs. 2 lakhs.
- Leave Travel Allowance (LTA): Employed housewives who receive an LTA can claim a deduction on the LTA amount utilized. For this financial year, the maximum permissible deduction is Rs. 30,000.
- Expense Reimbursements: Housewives who receive reimbursements for certain expenses – be it medical, educational, or travel – can claim a deduction for the reimbursed amount.
Apart from these deductions, there are specific tax exemptions that homemakers might be eligible for. Notably, the interest earned from a savings account is tax-free up to a limit of Rs. 3,500 for individual accounts and Rs. 7,000 for joint accounts.
To fully benefit from these deductions and exemptions, housewives should consider consulting a tax advisor, ensuring they file their ITR for housewife meticulously. Here are a few crucial pointers regarding income tax for housewife deductions and exemptions:
- Claims for deductions and exemptions should be made in the appropriate financial year.
- Retaining documentation that validates the deductions and exemptions is crucial for potential references.
- Deduction and exemption rules can evolve. Thus, regular consultation with tax authorities or professionals is advised to stay updated.
What is the nature of employment for a housewife in an ITR?
The nature of employment for a housewife in an ITR is 'Housewife.' This is because housewives do not have any regular income from employment
Why is the nature of employment important for an ITR?
The nature of employment is essential for an ITR because it determines the tax slabs that apply to the individual's income. For example, the tax slabs for salaried individuals differ from those for self-employed individuals.
What if a housewife has some income from other sources, such as interest income or rental income?
If a housewife has some income from other sources, she should still declare it in her ITR. The nature of employment for this income will be 'Housewife with other sources of income'.
Can a housewife claim any deductions or exemptions in her ITR?
Yes, housewives can claim certain deductions and exemptions in their ITR. Some of the deductions available to housewives include standard deductions, medical expenses, and donations to charity. Some exemptions available to housewives include income from savings accounts and agricultural land.
What are the steps involved in filing an ITR as a housewife?
The steps involved in filing an ITR as a housewife are as follows: Gather all the necessary documents, such as your PAN card, Aadhaar card, and bank statements. Choose the correct ITR form. Housewives should use ITR-2 or ITR-3, depending on their income. Fill out the ITR form carefully. Attach all the necessary documents to the ITR form. Sign the ITR form. Submit the ITR form online or by post.