Out of the numerous supports that family extends to an individual, one is financial. Apart from helping one with finances family can help in saving taxes too. Though all the investments and expenditures incurred by an individual are not eligible for Tax deductions, but there are many rules though some complex that provide for tax rebates.

Hereunder, are few salient points to explain how one can legally save taxes with family’s assistance especially in context to parents. Parents not only provide protection physically, emotionally, mentally, financially etc. but help one save substantially on taxes too.

1. Buying health insurance for the family: Under the provisions of section 80D, buying health insurance and preventive health check-up costs for individual, spouse and children up to Rs. 15,000 are entitled to deduction and if one includes parents who are senior citizens will fetch another Rs. 20,000 as an additional deduction.

2. Invest through parents and gift them: If one invests through parents the advantage is that no clubbing rules are applicable on one’s income. Money or gift made to them will not attract gift tax if the cost is Rs. 2 lakh for parents aged up to 60 years, Rs. 2.5 lakhs for parents above 60 years and Rs. 5 lakhs for parents above 80 years.

3. Pay rent to your parents: Another way to save tax is to buy and gift a house in your parent’s name and then pay rent to them if one is living with them. It will not only enable one to claim House Rent Allowance but the parents getting rent can claim a flat 30% of the annual rent in the form of maintenance expenses whether or not they match the actual expenses incurred.

We have suggested some ways how one can save tax through parents. There can many more ways one can make tax planning involving parents.