With the Union Budget 2017-2018 currently in progress, we speak to Shefali Goradia, Partner at the professional services and tax firms, BMR & Associates LLP, about what women could expect from the Budget.
1. The Gender Pay gap is still prevalent in companies around the country, yet the tax slab has been made same for both men and women, do you think government will take cognizance of the fact and make some changes in the Union Budget?
It is expected that the Government may re-introduce a higher basic exemption limit and also increase the subsequent tax slabs for women
A few years ago, the Finance Act provided a higher tax slab to women and a special tax rebate of Rs 5,000. These benefits were consciously done away with in the subsequent Finance Bills. It is expected that the government may re-introduce a higher basic exemption limit and also increase the subsequent tax slabs for women. It may also increase the exemption limit of education allowance granted to a salaried individual (currently exemption of only Rs 100 per month is allowed up to maximum 2 children) with an additional benefit for girl child education. Increase in the planned expenditure towards subsidized healthcare facilities for women, better infrastructure, education facilities etc as well as announcement of easy finance scheme for women startups may be announced.
2. Although there is indication of further tax rebates for startups, what tangible clause can the government provide in the Union Budget which would specially be helpful for aspiring women entrepreneurs — many of whom have problems getting access to loans to begin with?
There are certain private and public sector banks which are presently offering small business loans to women at concessional interest rates
Scaling up the operations of such banks and increasing the awareness about the benefits offered by them would really give a boost to women entrepreneurs. The government could further provide guarantees and tax rebates to the lenders (including banks and NBFCs) on the loans granted to women entrepreneurs.
3. When it comes to personal taxes and investments, what is the one thing that women should keep in mind?
Women can save tax by investing in health insurance schemes that can minimize the healthcare expenses in future. Similarly, investments in endowment plans offered by insurance companies can provide financial protection to women and their families. Also, in procuring a housing loan, one would be able to claim a deduction of the principal amount and the interest. The government may consider providing an additional deduction of the interest paid on housing loans for women.
4. Like the Sukanya Samridhi Yojna, what other schemes could the government introduce to help young women get quality education and also encourage their entrepreneurial spirit and creativity?
The government could deploy special funds for improvement of women’s education in Tier-II and Tier-III cities in government schools. It could also regulate the rising costs of education in private schools and encourage banks to offer a lower rate of interest on education loans for girls wishing to pursue higher studies. The government could increase the planned expenditure towards primary and secondary education for girls and create more awareness of their schemes like ‘Beti Bachao, Beti Padhao Yojana’.
To encourage the entrepreneurial spirit, the government could encourage crowdfunding projects that provide loans to women entrepreneurs at a lower rate of interest and a wider network
In doing so, the government may provide tax benefits to such organisations (including foreign start-ups wishing to start their projects in India) so as to increase the number of women entrepreneurs in India. The government could provide financial support to companies by starting initiatives such as hiring trained women drivers to ensure women’s safety and security. The government may introduce employment policies with a specific focus on women, ensuring equality at work and a supportive legal and political empowerment.
5. When a woman reads a Budget document, what are the main heads/ points she should go straight to?
One should first check if there are any changes in tax slabs, tax rates, introduction of any investment linked deductions or subsidies for women (like Pradhan Mantri Ujjwala Yojana to provide free LPG connections to women from below poverty line families) etc. One should also check the tax relief on essential commodities and services (ie the rate of indirect taxes) and maternal and medical benefits introduced.