We can’t suggest much about love but we can surely tell you how you can claim tax benefits and enjoy tax savings on gifts and purchases you made for your spouse.

The bad news is that if you gift flowers and chocolates to your loved ones this valentine’s day, you would not be eligible for this tax benefit. However under the following scenarios you can claim tax benefits for gifts that you have given to your spouse or loved ones.

The tax benefits for a gift to a fiancé or spouse

If you gift your spouse in kind or cash then it is not taxable in their hands but any income generated by the gift in kind or cash shall be treated as your income. If you are gifting your fiancé in cash then there is no tax implication. However you have to restrict the cash amount to Rs.50,000. If you do not abide by this the entire amount shall be added as an income to your fiancé.

Tax on wedding gifts

The good news is that no gifts received on the occasion of your marriage shall be taxable. However there is a monetary limit attached to this exemption.

Transferring assets to spouse or fiancé- does that create a tax issue?

If you transfer a property, for example a house to your spouse, then any income accruing to your spouse from this property shall come under your income and taxed in your hands.

However if you transfer the same property to your fiancé and you are supposed to get married soon then even after  your marriage any income generated from this property shall not be clubbed under you income. As the marital relationship did not exists during the time of transfer.

Giving gifts to parents

There is no tax liability for you if you wish to gift your parents in cash or kind.

Can I reduce my taxable salary by getting a car lease in favour of my wife?

We can’t say if true love is leasing a car from your wife, but we can certainly tell you that you can get a tax benefit if your employer can structure your salary such that your company leases your car from your wife. Accordingly you can reduce your taxable salary by the lease rental amount.

Lets take an example. Shyam has a salary package of Rs.15 lakhs. He also maintains a car taken in name of his wife Radha, who is a housewife and has no major taxable income. Shyam can ask his employer to take his wife’s car on lease, say for Rs.20,000 per month ,.i.e., Rs.2.4 lakhs per annum. This reduces Shyam’s salary by Rs. 2.4 lakhs and accordingly he can save taxes on this amount.

The lease rental income shall now be taxable as Radha’s income. She can claim car maintenance and running expenses against the rental income. Further, after applying her tax slab, her tax liability can be virtually reduced to zero.

Therefore, as a married couple Shyam and Radha have managed to save on taxes

Tax benefit on co-owing the house with your spouse

In a situation where you have taken a home loan for your house and are co-owing the house with your fiancé then both of you will be separately entitled to tax deduction on account of interest and principal repayment.