The financial year is coming to close soon, whilst the country is still reeling from the effects of demonetisation. There is no difference in income tax slabs between men and women (below the age of 60), as opposed to earlier where women got an additional concession of Rs 5,000. Having said that, last year 500 crores was allocated to the StandUp India scheme to encourage women entrepreneurs from SC/ST backgrounds.
Allocations to National Mission for Empowerment of Women was doubled to Rs 50 crore. One could hope that this Union Budget caters to the needs of marginalised women and children in at-risk circumstances like trafficking or domestic violence will be looked at this time. However here are a few women can save in personal taxes:
One can get a tax deduction of up to Rs 25,000 on health insurance (an additional of Rs 5,000 if it is a senior citizen). This one is a win-win because not only do invest in your family’s healthcare but also end up paying less tax.
1. Health Insurance: Not just for yourself but also the family. One can get a tax deduction of up to Rs 25,000 on health insurance (an additional of Rs 5,000 if it is a senior citizen). This one is a win-win because not only do invest in your family’s healthcare but also end up paying less tax.
2. Investments: You could be allowed a deduction of Rs 1,50,000 for investing in Provident funds – Public Provident Fund (PPF), Employee Provident Fund (EPF), Equity-linked Saving Schemes (ELSS) among others.A woman can also save by investing in life insurance plans which could financially secure her and her family’s future.
If your daughter is less than 10 years of age you can benefit from the Sukanya Samridhi Yojna. A fixed return of 9.2 per cent is guaranteed for a deposit of up to Rs 1,50,000 every year.
3. Investing in your daughter: If your daughter is less than 10 years of age you can benefit from the Sukanya Samridhi Yojna. A fixed return of 9.2 per cent is guaranteed for a deposit of up to Rs 1,50,000 every year. The maturity and interest amounts are tax-free and the amount has to be locked in until the girl (who is also the account holder) turns 21. In the case of her marriage, the entirety of the amount can be withdrawn. Or else at the age of 18 half of its withdrawal is permitted for her higher education.
4. Home Loans: According to Section 80 C deduction of Rs 1,50,000 is allowed on the principal of the housing loan. While Section 24 allows up to 2 lakh of tax exemption on the loan’s interest. If you are purchasing a house for the first time, you could also get an additional deduction of Rs. 50,000 on the interest component of up to Rs. 35 lakhs. This, keeping in mind, that the net worth of the property is not more than 50 lakhs.
5. Educational Loans: If you are still aspiring to get your masters, this might nudge you one step further. An educational loan is taken for yourself, your spouse or children can earn you a tax exemption of Rs 1,50,00 per year. This will be valid for a maximum of seven years or until the repayment of the loan.
So women, if you want to save in taxes, long-term investments, pertaining to health, education, housing, life insurance etc are encouraged. The returns, albeit varied, are guaranteed to make your future more stable and secure.
Tax Expert Sudha C. Bhushan also suggests the following ways that government can impact women’s taxes in the upcoming Union Budget:
- Slab Rate: Presently, the basic exemption slab rate for women is at par with other individuals i.e. INR 2,50,000. This slab rate for taxation of income of women should be increased to INR 3,00,000.
- Deduction under Section 80C: The deduction under Section 80C (via Provident Fund investment options) of the Income Tax Act should be increased for women.
- Investment in Equity share of listed companies: There should be a new section where deduction is permitted for women investmenting in equity shares of AA rated listed companies. This will boost the savings for women and provide much necessary liquidity for the sectors in which investment is required.