BENGALURU: It is tax season. Time to fill all those annual taxes - income tax returns, GST filing, professional tax, property tax and hopefully, not many other taxes! Despite efforts to simplify taxation regimes, there are many times that the everyday person is surprised by some tax demand or the other, needs taxation related clarifications and advice, and seeks out a chartered accountant or other consultants for advice on what to do with these demands, how to address compliance, and the big question – how to save on taxes.
Internationally, for many countries, the impact of being in a legally recognised relationship is generally tax advantageous though there are some exceptions, especially where there is parenting involved. While most countries tend to give exemptions and deductions for child-care, elder-care and other social obligations, there are also countries where there are tax penalties depending on what the country sees itself needing, and the way the societies work.
In the Indian taxation systems, there are many different forms of units recognized for tax purposes, and yet there are dozens of other relationship formats that are not really recognised legally for taxation and leaves them as individuals. While live-in relationships have some legal protections, they are not necessarily recognized as a unit for taxation, for example.
Even in relationships recognised for taxation and financial purposes, there are many different conditions and parameters. While some transfers are OK, others might invite taxation. Gifts and certain expenses may be deductible, while others are not. If there are income level differences or there is one earning member, then how that pans out in terms of tax again has its own ramifications. It also matters if both parties had filed taxes separately before becoming a couple, or if they had not, or were part of some other tax union. It gets so complex for a new couple, making decisions on whether to file jointly or separately, that it might just be advisable to consult a qualified person while making these decisions.
Beyond the practicalities of the taxation system and the skills it requires to jump through all its hoops and loops, the basic question remains: How do you talk tax and other such mundane matters with your loved one? Can questions of tax and money ever be romantic, or are they destined to be difficult conversations, fraught with risks of becoming ugly fights on who earns more, who spends more, why there aren’t enough savings and so on? We tend to think of taxes and other legalese as exhausting aspects that one just has to grit one’s teeth and get through, hopefully with the least bit of negativity.
One part of the frustration around it is all the complicated legalese, and another part is to check on how much trust and confidence partners have on each other around matters of finance. If it is only the first, doing the taxes can actually be a way of feeling together in the cribbing and the pain, but if it is more than that, there is work to do on the fiscal intimacy in a relationship. The author is a counsellor with InnerSight