Have you ever wondered if housewives need to pay income tax in India? As a homemaker, you may not have a regular salary, but you can still earn income from other sources. Understanding income tax rules for housewives is important to ensure you are complying with regulations.
This comprehensive guide will explain everything you need to know about income tax for housewives in India.
Table of Contents
Do Housewives Need to File ITR?
As per income tax laws, a housewife needs to file ITR if her total income from all sources exceeds the minimum tax exemption limit in a financial year.
For the financial year 2022-23, the exemption limit is:
- ₹2.5 lakhs for women below 60 years (old tax regime)
- ₹3 lakhs for women below 60 years (new tax regime)
- ₹3 lakhs for women between 60-80 years
- ₹5 lakhs for women above 80 years
So if your total income crosses these thresholds, you have to file ITR even if you are a homemaker with no salary income.
Income Tax Slabs for Housewives
The income tax slabs for housewives are the same as individual tax slabs in India. The tax rate applicable depends on your age and income slab:
A. Old Tax Regime
| Total Income | Tax Rate |
|---|---|
| Up to Rs. 2.5 lakhs (below 60 years) | Nil |
| Rs. 2.5 lakhs – 5 lakhs | 5% |
| Rs. 5 lakhs – 10 lakhs | 20% |
| Above Rs. 10 lakhs | 30% |
B. New Tax Regime
| Total Income | Tax Rate |
|---|---|
| Up to Rs. 3 lakhs (below 60 years) | Nil |
| Rs. 3 lakhs – 6 lakhs | 5% |
| Rs. 6 lakhs – 9 lakhs | 10% |
| Rs. 9 lakhs – 12 lakhs | 15% |
| Rs. 12 lakhs – 15 lakhs | 20% |
| Above Rs. 15 lakhs | 30% |
So based on your income slab and regime, the applicable tax rate will be levied. Those over 60 can claim higher basic exemptions.
Sources of Income for Housewives
Even if you are not earning a salary, you can still have income from other sources as a homemaker. Some common sources of income for housewives include:
- Interest income from savings accounts, fixed deposits, bonds etc.
- Rental income from any owned property
- Capital gains from sale of assets like house, gold, mutual funds etc.
- Gifts received in form of cash or kind (except from specified relatives)
- Prize money from contests, lotteries etc.
- Pension received by widow of deceased husband
- Income from business if engaged in any
All such incomes are taxable beyond a certain exemption limit. So you must report it correctly in your ITR.
Tax Deductions and Exemptions for Housewives
The good news is that the Income Tax Act provides several deductions and exemptions to reduce your taxable income. As a housewife, you can avail of the following:
- Section 80C deductions – Investments up to ₹1.5 lakhs in PPF, NSC, ELSS, life insurance premiums can be claimed as deduction under Section 80C.
- Section 80D deductions – Health insurance premium paid for self, spouse and children qualifies for deduction under 80D.
- Section 80GG:- If assessee lives in a rented house, she may claim deduction under this section after satisfying few conditions.
- Section 80DD – Get tax benefits if you pay medical treatment expenses for a disabled dependent.
- Section 80TTA – Interest income from savings account up to ₹10,000 is tax exempt.
- Section 80TTB – Senior citizens can claim deduction on interest income up to ₹50,000.
- Section 80DDB – Get deduction for expenses incurred on treatment of certain illnesses.
So by claiming these deductions strategically, you can reduce your tax liability. Maintain proper documents and proofs to claim them correctly.
How to Calculate Taxable Income
Your taxable income will be calculated as:
Total Income from all sources
(-) Deductions under Section 80C, 80D, 80TTA etc.
(-) Exempt income like HRA etc.
= Taxable Income
Based on the tax slab applicable to you, the rate of tax will be levied on this taxable income figure.
For instance, if you have:
- Interest income from FD: ₹3.2 lakhs
- Rental income: ₹1.8 lakhs
- 80C deductions: ₹1.5 lakhs
- HRA exemption: ₹0.6 lakhs
Your calculation will be:
- Total Income = ₹3.2 lakhs + ₹1.8 lakhs = ₹5 lakhs
- Deductions = ₹1.5 lakhs
- Exempt income = ₹0.6 lakhs
- Taxable Income = ₹5 lakhs – ₹1.5 lakhs – ₹0.6 lakhs = ₹2.9 lakhs
As per new tax regime, ₹2.9 lakhs income will be taxed at 5%. So your total tax liability comes to ₹14,500.
This way you can calculate your tax liability.
How to File ITR as a Housewife
The process of filing ITR for housewives is similar to filing for salaried individuals. Follow these steps:
- Determine your total income and applicable ITR form based on income source. For housewives, ITR 1 or ITR 2 is generally applicable.
- Collect required documents like interest certificates, income proofs, investment proofs etc.
- Calculate your tax liability accurately using deductions and exemptions.
- Register on the Income Tax e-filing portal. Create your user ID and password.
- Start filling your ITR form online. Fill all details correctly and compute your tax.
- E-verify your ITR and submit it before the due date. For FY 2022-23, the deadline is 31st July 2023.
- On successful submission, you will get an acknowledgement (ITR-V) on your registered email ID.
Even if you have zero or very minimal income, it is advisable for housewives to file ITR to avoid any future tax notice. Maintain proper documents and proofs while filing returns.
Frequently Asked Questions
Q. Can I claim my husband’s investments under section 80C?
No, deduction for Section 80C can only be claimed for your own investments, not your spouse’s.
Q. Do I need to pay advance tax as a housewife?
If your estimated tax liability for the year exceeds ₹10,000, you are required to pay advance tax. Make payments in installments before the due dates.
Q. I am a housewife with no income. Do I still need to file ITR?
It is recommended to file ITR even with zero income to avoid any tax notice. It also serves as an income proof.
Q. What documents do I need to file ITR as housewife?
You’ll need proof of income, interest certificates, Form 16A, investment proofs for deductions, bank statement and copy of previous year’s ITR.
Q. I inherited some jewellery from my mother this year. Is it taxable?
No, assets inherited from parents/relatives are not subject to tax. However, selling those assets may incur capital gains tax.
Conclusion
We hope this detailed guide helped you understand income tax compliances for housewives better. Even if you are a homemaker, you must diligently file returns if total income exceeds exemption limits. Utilize deductions prudently to reduce taxable amount. Maintain all documents and proofs.
Filing income tax returns also helps housewives build a strong financial profile for future needs like loans, investments etc. So ensure you are up-to-date with your ITR filings.
Follow the tips in this guide or take assistance from experienced tax professionals like Filingwala.com to ensure error-free ITR filing every year. Their team of CA experts can help you claim all eligible deductions and exemptions correctly to minimize your tax liability.
