Tax planning guides Family tax planning
Family Tax Planning: Multiply Your Tax-Free Limits
Every adult in your family has their own tax slab, basic exemption and ₹1.25 lakh of tax-free long-term equity gains each year. Planning investments across the family, within the clubbing rules, can cut the household tax bill.
Clubbing: when income is still taxed in your hands
| Situation | Whose income for tax? |
|---|---|
| You gift money to your spouse, who invests it | Yours: the income is clubbed with your income |
| Investments in a minor child's name | The parent with higher income (₹1,500 exempt per child a year) |
| Adult children or parents invest their own income | Theirs, at their own slab |
| You gift money to an adult child or your parents | The gift is tax-free; future income is theirs |
| Joint folio | Taxed in the first holder's hands |
More ways to spread tax across the family
| Method | How it saves tax | Regime |
|---|---|---|
| Gift to parents or adult children to invest | Gifts to relatives are tax-free; income is taxed at their lower slab | Both |
| Pay rent to parents for your home | You claim HRA; parents report the rent at their lower slab | Old |
| Health insurance for senior parents | Deduction up to ₹50,000 on their premium | Old |
| Lend to your spouse at a fair interest rate | A genuine loan avoids clubbing; the spouse keeps the extra return | Both |
| Employer NPS contribution | Up to 14% of basic salary is deductible | New |
| Separate folios for each adult | Each adult uses their own ₹1.25 lakh of tax-free equity gains | Both |
Practical steps
- Invest in each earner's own name, from their own income.
- Harvest up to ₹1.25 lakh of gains per adult every March.
- Let family members in lower slabs hold debt funds and FDs.
- Keep gift deeds and bank records for money given to relatives.
- Review the whole family's plan together once a year.
Common questions
Is a gift to my spouse taxable?
The gift itself is tax-free, but income earned on it is clubbed with your income. A genuine loan at a fair interest rate avoids this.
Please note: This guide is investor education, not tax or investment advice. Figures are illustrations using assumed returns and are not guaranteed. Tax rules shown apply for FY 2026-27 (tax rules as of September 2026) and can change; please confirm your own situation with a chartered accountant. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully.
Want this applied to your own numbers?
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