Spouse Can Claim Tax Benefit Only If Servicing A Home Loan

The tax benefits in respect of the repayment of the principal on a home loan is available under Section 123 read with Schedule XV, while the interest payment is available under Section 22 of Income-tax Act, 2025 which is applicable from April 1, 2026. These deductions are calculated with reference to the EMIs paid on the home loan.

EMI consists of two components:  principal repayment and interest. Each of the co-owner and co-borrower servicing the loan can only take the benefits in the ratio in which the loan is being serviced. As your wife is not servicing the home loan, she cannot claim any deduction in respect of the loan. Even if she is servicing the home loan and is co-owner as well, the portions of principal repayment and interest cannot be allocated to separate borrowers and each of the borrower has to claim their respective share of principal prepayment and interest payment in the EMI serviced by them.

Generally, the recipient is required to pay tax on the gifts received by him/her if the aggregate value of all the gifts received during the year exceeds Rs. 50,000. However, there are certain exceptions. One such exception is in respect of gifts received from specified relatives, including children. Since a son is covered under the definition of specified relatives, your parents will not have to pay any tax on the amount of gift made by you. However, there is no provision for granting any tax benefits to the person making such gifts. So, you cannot take any tax benefit in respect of money gifted to your parents. 

The company for which you are working is correctly deducting tax at a flat rate of 10 per cent without taking any cognisance to your investments, home loan repayment and rebate under Section 156 of the Income-tax Act, 2025.

Do note that total tax deducted at source (TDS) on your income will not always be equal to your tax liability. In some cases, you will be entitled to a refund, and in some cases you may have to pay more taxes.  In either of these situations, you should file your income tax return (ITR) either to claim the tax refund, or discharge your balance tax liability. Please note that even if you are entitled to a tax refund, if your income exceeds the exemption limit, you are legally required to file your ITR.

Since you are not working as an employee, but as a consultant, the company cannot take into account the deductions and rebates which you are entitled to claim. However, you can claim these deductions and rebate while filing your ITR.