Filing ITR? Tax benefits you and your spouse can avail if you have kids

As the deadline for filing Income Tax Returns (ITR) approaches on July 31, it is crucial to be aware of the various exemptions available. One key area where taxpayers can benefit from exemptions is when they have children.
Families with children can take advantage of specific exemptions within the income tax slabs to reduce their tax liability. These exemptions are designed to help parents manage the financial burden of raising children and provide some relief from the tax obligations.
By understanding and utilizing these exemptions effectively, taxpayers can potentially lower their overall tax burden and maximize their savings.It is essential for individuals with children to be well-informed about the available exemptions and ensure they take full advantage of them while filing their income tax returns before the deadline.
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Here are a few ways you can save tax if you have kids:
Education expenses: Deduct tuition fees paid for children's education under Section 80C of the Income Tax Act, up to ₹1.5 lakh per financial year, per child for courses in India.
Children's savings accounts: Interest earned on children's savings accounts up to ₹1,500 per child per year is exempt from tax under Section 10(32).
Health insurance premiums: Premiums paid for health insurance covering children (including dependent parents) qualify for deductions under Section 80D, up to ₹25,000 (₹50,000 for senior citizens).
Medical expenses: Medical expenses for children's treatment (including preventive health check-ups) can be claimed as deductions under Section 80D.
Investment in Sukanya Samriddhi Yojana (SSY): Contributions to SSY for a girl child are eligible for deductions under Section 80C, with tax-free interest accruals and withdrawals.
Education loan: If you take a loan for your child’s higher education, then the interest component that you pay on the loan will be deductible under Section 80E for eight years from the time that the repayment starts.
Term insurance: If you have not exhausted the Section 80C limit of Rs 1.5 lakh a year with your investments, you can invest for your child to avail of the full exemption. For instance, you can invest in the PPF, Ulips, mutual funds and some traditional plans, but remember that the income from these will be added to your income and taxed at the applicable rate. This can be avoided by investing in instruments that do not tax income, such as the PPF, or equity mutual funds, where the profit is not taxed if it is less than Rs 1 lakh a year.
Public Provident Fund (PPF): Opening a PPF account in a child's name qualifies for deductions under Section 80C, with tax-free interest and maturity proceeds.
National Savings Certificate (NSC): Investment in NSC for a child qualifies for deductions under Section 80C, providing a secure savings option with tax benefits.