BENGALURU: The financial year 2022-23 just ended for us here in India. Some countries keep the calendar year and financial year the same, and yet other countries keep to a June timeframe. The merits of one against the other notwithstanding, the end of the financial year brings its very specific impacts on people who are living together especially when the living together is because of romantic relationships rather than only as a pure convenience-based co-living situation.
As things stand, even co-living is not as easy from a financial perspective, but it becomes that much harder when it is more than a shared rental agreement basis.
Typically, adults living and working together might have a shared rental agreement with rent receipts given to each by the house owner, or one tenant gets the rent receipt while having arrangements with the others on how they pay up.
Other expenses happen through a shared pool of funds, or a monthly settlement against shared expenses through an app such as SplitWise or the such, or old-fashioned ledgers either electronic or pen-and-paper systems. It all works out.
However, when there is love in the picture, and people have different proportions of earnings and expense, and there are different legal aspects to how their love is recognised or acknowledged by the national government from a tax or financial perspective, it can get really challenging.
Add to it, in the Indian context, a variety of different systems such as the HUF, community-based systems that are extra-legal in some sense, and family arrangements that may not always include partners, financial issues between people can come to quite a head at any time, and especially at times like end of the financial year when each person wants to square off accounts, collect all kinds of receipts and documents, check insurance payments, healthcare bills, education receipts, life certificates, random other deductibles including even journal receipts and food bills, and get ready to file income tax returns.
Love can stand all kinds of friction, and yet, financial friction can make it especially difficult. When there are incentives from the government for certain kinds of relationships, specific kinds and numbers of dependents and all sorts of regulations, love can be find itself tossed around a little like a boat adrift on a calm, crystal clear sea that gives great views of the coral reef and all sorts of colourful creatures swimming about in peace and joy, suddenly finding itself facing a proper thunder storm.
Even when there are incentives offered in terms of rebates and things, people living with loving relationships and all having their own income taxes to take care of, often act as if there was no financial cost or benefit to living together, and handle their finances independently.
Can love be really financially beneficial tax-wise? It is a lot to manage, even if it were!
One almost wishes that income tax was abolished altogether in favour of indirect taxes such as GST and a substantive gift and inheritance tax to keep things balanced over generations across social classes!