Should a housewife file income tax return? How does it work?

Filing an Income Tax Return (ITR) is a crucial financial obligation, and this requirement is not limited to salaried individuals alone. Homemakers, too, may be required to submit tax returns if they earn income from sources other than a regular salary. Such earnings generally fall under the category of ‘Income from Other Sources’ and may include interest from fixed deposits, rental income from property, or returns from investments. If these earnings exceed the exemption limits prescribed by the government, filing an ITR becomes compulsory.

Do homemakers need to file an ITR?

According to the Income Tax Act, individuals whose annual income remains below the prescribed basic exemption limit are generally not required to file an income tax return, subject to certain conditions. Under the new tax regime, the basic exemption threshold is ₹4 lakh per financial year, while it is ₹2.5 lakh under the old tax regime for taxpayers below 60 years.

This provision applies equally to homemakers. Therefore, if a housewife’s total annual income is below the prescribed limit, she is not obligated to file an ITR. However, the filing requirement depends on both age and income levels. Women below the age of 80 must file an ITR if their annual income exceeds the prescribed limit. For super senior citizens aged above 80 years, the filing requirement arises when annual income crosses ₹6 lakh under old tax regime and Rs. 4 lakh under new regime.

Common sources of income for homemakers

Although homemakers are not salaried employees, they may still earn income from various avenues. Some of the common sources include:

Household Allowance from Husband: Money provided by a husband to manage household expenses is not treated as the wife’s income, even if it is transferred directly into her bank account.

Interest from Fixed Deposits: Interest earned on fixed deposits held in the homemaker’s name is considered her income. If the interest income exceeds the applicable exemption limits, it becomes taxable.

Investments Made by Husband in Wife’s Name: When a husband invests his own funds in the name of his wife, the invested amount is generally linked to the husband’s income. However, any income generated subsequently from such investments may be treated as the wife’s income and taxed accordingly, depending on applicable tax provisions.

Gifts Received: Gifts received from specified relatives are exempt from tax. However, gifts from non-relatives may attract tax if their aggregate value exceeds ₹50,000 in a financial year.

Tax deductions and exemptions available

The Income Tax Act offers several deductions and exemptions that can help homemakers reduce their taxable income.

Medical Insurance Premiums: Under Section 80D, a deduction can be claimed on health insurance premiums paid for self or eligible family members during the financial year.

Charitable Donations: Contributions made to approved charitable institutions qualify for tax deductions under Section 80G, subject to prescribed conditions.

Interest Income Relief: Individuals below 60 years can claim a deduction of up to ₹10,000 on savings account interest under Section 80TTA. Senior citizens can claim a deduction of up to ₹50,000 on eligible interest income under Section 80TTB.

Post Office Savings Accounts: Section 10(15)(i) provides an exemption on interest earned from post office savings accounts up to ₹3,500 for individual accounts and ₹7,000 for joint accounts. Homemakers holding such accounts can benefit from this exemption.

Income tax slabs for 2026-27 (New Tax Regime) for women below 60 years

Up to Rs. 4 lakh - Nil tax

Rs. 4 lakh to Rs. 8 lakh - 5%

Rs. 8 lakh to Rs. 12 lakh - 10%

Rs. 12 lakh to Rs. 16 lakh - 15%

Rs. 16 lakh to Rs. 20 lakh - 20%

Rs. 20 lakh to Rs. 24 lakh - 25%

Above Rs. 24 lakh - 30%

Income tax slabs for women below 60 years (old tax regime)

Up to Rs. 2.5 lakh - Nil

Rs. 2.5 lakh to Rs. 5 lakh - 5%

Rs. 5 lakh to Rs. 10 lakh - 20%

Above Rs. 10 lakh - 30%

For women between 60 and 80 years (old tax regime)

Up to Rs. 3 lakh - Nil

Rs. 3 lakh - Rs. 5 lakh - 5%

Rs. 5 lakh - Rs. 10 lakh -20%

Above Rs. 10 lakh - 30%

For women between 60 and 80 years (new tax regime)

Up to Rs. 4 lakh - Nil

Rs. 4 lakh - Rs. 8 lakh - 5%

Rs. 8 lakh - Rs. 12 lakh - 10%

Rs. 12 lakh - Rs. 16 lakh - 15%

Rs. 16 lakh - Rs. 20 lakh -20%

Rs. 20 lakh - Rs. 24 lakh - 25%

Above Rs. 24 lakh - 30%

How Homemakers Can Calculate Taxable Income

To determine taxable income, homemakers should aggregate income earned from all taxable sources and then deduct eligible exemptions and deductions available under the Income Tax Act. Common income sources include interest from bank deposits, fixed deposits, gifts, rental income and investment returns. Deductions may include investments in schemes such as PPF, NSC, health insurance premiums and eligible charitable donations.

Since manual calculations can be time-consuming and prone to errors, using an online income tax calculator can simplify the process. By entering income details and eligible investments, taxpayers can quickly estimate their taxable income and tax liability with greater accuracy.