Article

If Your Spouse is Earning
June 10 , 2013

Merging finances

For some couples losing financial independence is a strict no-no while others believe everything in their life including finances should be shared. Depending on how both spouses feel about it, develop a system of budgeting and accounting of finances that will keep both informed at all times. A great way to handle finances is to maintain three accounts; one for each and one as a joint account. When both couples are earning some couples prefer to cut expenses in half and each pays for their half while others prefer one person handling all bills. Again you must do what works best for you as a couple.

Dealing with debts

If you have large debts from purchase of home, vehicle, etc, you can lighten your spouse's yoke by contributing in the repayment. Debt is a major issue of contention in many households. Even if debt was created before marriage, try to pay it off jointly as early as possible.

Tax benefits

The greatest benefit of both couples working is that they can effectively claim double tax exemptions.

Married spouses can claim tax deduction on repayment of home loan. A joint home loan offers a benefit of Rs 1 lakh each under Section 80C of Income Tax Act for repayment of principal and additional Rs 1.5 lakhs each on the interest repayment under Section 26.

You can save up to Rs 1 lakh each by investing in general insurance, mutual funds or provident fund under section 80C. Similarly you can claim an exemption of Rs.15,000 each on medical insurance amount paid for the family and Rs 20, 000 each on premiums paid for parents aged 65 and above under section 80D. Interest paid on higher education loan taken for self, spouse or children is tax-free for seven consecutive years under section 80E. 

If you are entitled to LTA or Leave Travel Allowance an exemption can be claimed in respect of 2 journeys undertaken in a block of four calendar years. With both spouses working you can save double the amount on tax by traveling anywhere in India every two years!

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