Income tax benefits for women

Like every year, the Union Budget always comes with a lot of hopes and expectations. A few days back, we witnessed the revelation of this year’s budget by the Hon’ble Finance Minister. As expected, there have been certain additions and alterations in the new tax regime.

On 1st February, the Union Budget of 2023-24 was presented. As per expectation, there have been certain changes in the new tax regime to the old one. However, the tax-payment aspect seems to be the most vital aspect for the common people. As a responsible citizen, you can never ever forego your taxes, but through proper planning and execution, you can save a lot of tax amount, thus eventually aiding your ineffective financial portfolio management.

Major highlights of the new tax regime

Some of the major highlights of the newly presented tax regime are as follows:

• The basic limit of exemption has been raised from INR 2.5 lakhs to INR 3 lakhs
• Between INR 3 lakh and INR 6 lakhs: 5%
• Between INR 6 lakhs and INR 9 lakhs: 10%
• Between INR 9 lakhs and INR 12 lakhs: 15%
• Between INR 12 lakhs and INR 15 lakhs: 20%
• Above INR 15 lakhs: 30%
• Standard deduction has been introduced for pensioners, salaried taxpayers, and family pensioners, too.
• The highest surcharge rate has been reduced from 25% to 37%
• The TDS rate on withdrawals of EPF has been reduced to 20%
• The optimum limit for investment in MIS has been raised to INR 9 lakh from INR 4.5 lakhs for a single account, and for a joint account, his limit is INR 15 lakhs rather than INR 9 lakhs
• The introduction of the Mahila Samman Certificate, a limited period small savings investment scheme for women offering fixed returns, allowing a deposit of up to INR 2 lakhs n the name of a minor girl or any woman for 2 years @7.5% allowing partial withdrawal.

Special women-centric approaches in the new tax regime

We know that the Finance Act of 2012 disseminated any gender-based differential tax slabs and a unified tax structure was introduced. However, the experts opine that it is important to offer additional tax benefits for women to ensure a well-lit future for them.

As per the current reports, there is no special income tax benefit for women and all of them are subject to the standard income tax slab. To ensure women’s empowerment in the country, the government has introduced several schemes like Ujjwala, Beti Bachao, Beti Padhao, Army schools, Sukanya Smarddhi Yojana, etc. Ensuring enhanced tax benefits is another major step forward to ensuring a secure future for women and enhancing their financial independence.

Major highlights for women in the new income tax regime

Some of the most highlighting proposal aspects of the new income tax regime for women are

• The tax rate up to an income limit of INR 7.5 lakhs has been reduced to 5%
• The deduction under the Section 80C category has been raised to INR 2 lakhs

Every Indian taxpayer has been classified into three basic categories based on the age of the taxpayer rather than gender:

• People who are below 60 years
• People aged between 60 years and 80 years term senior citizens
• People aged above 80 years are termed as super senior citizens.

The tax-paying ratio is inversely proportional to the age of the concerned taxpayer, be it a man or a woman.

For the financial year 2022-’23, the rate of income tax for women within 60 years with an annual income up to INR 2.5 lakhs did not need to pay any taxes; for income between INR 2.5 lakhs to INR 5 lakhs, the rate is 5%; between INR 5 lakhs to INR 7.5 lakhs it is 10%; between INR 7.5 lakhs to INR 10 lakhs, it is 15%; between INR 10 lakhs and INR 12.5 lakhs, it is 20%; between INR 12.5 lakhs to INR 15 lakhs, it is 25%, and above INR 15 lakhs, it is 30%.

For senior women citizens, the current tax slab for the FY 2022-’23 tuns like this:

• Up to INR 2.5 lakhs: NIL
• Between INR 2.5 lakhs and INR 3 lakhs: 5% above INR 2.5 lakhs
• Between INR 5 lakhs and INR 7.5 lakhs, it is INR 12500+10% above INR 5 lakhs
• Between INR 7.5 lakhs and INR 10 lakhs, it is INR 37500+15% above INR 7.5 lakhs
• Between 10 lakhs and INR 12.5 lakhs, it is INR 75000+20% above INR 10 lakhs
• Between 12.5 lakhs and INR 15 lakhs, it is INR 1.25 lakhs+25% above INR 12.5 lakhs
• Above 15 lakhs, it is INR 1,87,500+30% above INR 15 lakhs.

For super senior citizen women, the tax slab for FY 2022-’23 is

• No tax up to INR 2.5 lakhs
• Between 2.5 lakhs and 5 lakhs, it is 5% above INR .5 lakhs
• Between INR 5 lakhs and INR 7.5 lakhs, it is INR 12500+10% above INR 5 lakhs
• Between INR 7.5 lakhs and INR 10 lakhs, it is INR 37500+15% above INR 7.5 lakhs
• Between INR 10 lakhs and INR 12.5 lakhs, it is INR 75000+20% above INR 10 lakhs
• Between INR 12.5 lakhs and INR 15 lakhs, it is INR 1.25 lakhs+25% above INR 12.5 lakhs
• Above INR 15 lakhs, it is INR 187500+30% above INR 15 lakhs.

Additional surcharge for women

Under the tax slab of the financial year 2022-’23, any woman taxpayer with a yearly taxable income above INR 50 lakhs needs to pay an extra surcharge apart from the applicable tax slab. The rate is as follows:

You must remember that the optimum percentage of applicable surcharge is 15% on any income either by any dividend or under Sections 111A, 115AD, and 112A.

Any health insurance plan allows tax exemptions u/s 80D for the premiums paid, be that of a man or woman. Therefore, you can easily invest in a health insurance plan to optimise your income tax returns.

Income tax rebate for women

Under the tax regime of FY 2022-’23, any Indian taxpayer qualifies for a special rebate of either up to 100% or INR 12500, whichever is lower, with an annual income of up to INR 5 lakhs under the Old Tax Regime.

Through efficient investment strategies, you can further enhance your income tax return prospects. Investment in a health insurance plan is one such step. Women are eligible to claim an optimum tax deduction of up to INR 25000 for the premiums paid under section 80D of the Income Tax Act.

Investing in women health insurance not only saves your health but your finances too. A standard women health insurance plan aids in the early detection of any specific ailment, allowing secured coverage. Moreover, the women’s health plans are specifically crafted, offering them special benefits and discounts.

Apart from that, there are several other tax-saving investment tools like ELSS, PPF, life insurance premiums, annuity plans towards pension schemes, interest gains on savings accounts by senior and super senior citizens, any disabled resident taxpayer, etc., which is the same for men and women. However, no tax benefit deductions or rebates are allowed if you rile your income taxes under the New Tax Regime.

Conclusion

Just like women health insurance tax deduction claims fall under the 80D category, several other categories deal with other investment schemes. You must watch your income and investment schemes to plan and proceed accordingly to optimise your tax-saving benefits.

Disclaimer: The above information is for illustrative purposes only. For further details, please refer to policy wordings and documents before concluding the sales.