According to Humanity Welfare Council data, 80% of Indian women lack financial literacy, and approximately 62% of Indian women do not have bank accounts. As the world is marking International Women's Day (IWD) today, female participation in financial decision-making and proper tax planning will empower more to their traction in financial well-being. So, let's look at how women taxpayers can develop a proper tax planning strategy in 2023, because the deadline to file an Income Tax Return (ITR) for income earned in fiscal year 2022-23 is July 31. Dr. Suresh Surana, Founder, RSM India Some of the tax and other incentives which a women salaried employee can avail include reduced interest on home loan, stamp duty concession etc. to empower women. Besides the aforesaid benefits, some of the tax deductions / reliefs which salaried women may avail are as follows: TRENDING STORIES See All Premium Women's savings account: A financial guide for women to . . . Premium Biden's reverse card? After UK's Sunak, now US mulls de . . . Premium Adani Group repays $500 million bridge loan to regain i . . . Premium SBI Life declares interim dividend of ₹2. 5 per share. . . . Tax Savings specifically pertaining to Salary Income: 1. Section 16(ia) - Standard Deduction Every employee including women employee may claim a standard salary deduction of upto Rs. 50,000 u/s 16(ia) of the Income Tax Act, 1961 (hereinafter referred to as ‘the IT Act’). It is pertinent to note that such standard deduction may be claimed by the women employee under both the old as well as the proposed new tax regime. 2. 10(13A) - House Rent Allowance (‘HRA’) Every salaried women employee who is in receipt of HRA and who resides in a rental accommodation may avail the benefit of exemption under this section provided he/she does not own any residential accommodation occupied by him. 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(a) Actual HRA Received (b) 40% of Salary (50%, if house situated in Mumbai, Calcutta, Delhi or Madras) (c) Rent paid in excess of 10% of salary For the purpose of computation of such HRA exemption, Salary would constitute the Basic salary plus Dearness Allowance (if part of retirement benefit) and Turnover based Commission. 3. 10(14) - Special Allowances Many employees including women employees are in receipt of Conveyance Allowance, Daily Allowance, Helper/Assistant Allowance, Uniform Allowance from their employer against which they may claim exemption of an amount which would be lower of the following: (a) Allowance received (b) Actual amount spent Further, Salaried women who receive certain special allowances such as Children Education Allowance, Children Hostel Expenditure Allowance, etc. can claim an exemption up to Rs. 100 per month (for education) /300 per month (for hostel) per child up to a maximum of 2 children. 4. 10(5) - Leave Travel Allowance (LTA) Every women employee who is in receipt of LTA can claim deduction in connection with expenditure incurred (for self and family*) towards travelling within India. Family would constitute her husband and children; parents, brothers and sisters who are wholly or mainly dependent on her. The exemption of LTA can be availed for two journeys performed in a block of 4 calendar years i. e. 2022-2025, as per the prescribed conditions. Other Common Tax Saving Opportunities: 1. Section 80C - Investment in Sukanya Samridhi Yojana (SSY) Sukanya Samridhi Yojana was initiated by the Indian government under the campaign named “Beti Bachao Beti Padhao" and is currently providing 7. 6% interest rate. The benefit of this scheme can be availed by a single family for maximum 2 girls, provided the account is opened at a post office or commercial bank till she attains the age of 10. A minimum and maximum deposit of Rs. 250 and Rs. 1,50,000 respectively can be made in such scheme in any particular financial year. Amount deposited in the scheme can be claimed as a deduction from the taxable income up to Rs. 1,50,000 u/s 80C of Income Tax Act, 1961 (herein after referred to as ‘IT Act’). Further, any interest earned on such scheme would be tax free. 2. Section 80C – Deduction for certain specified Investments and Expenditures: Section 80C of the IT Act is one of the most popular deductions which every women employee should avail as it offers investment linked and expenditure based deductions. Some of the investment linked options under this section include Life Insurance Premium, Contribution to PPF, Equity Linked Savings Scheme (‘ELSS’), investments in 5 years fixed deposits, etc. Further, the section allows deduction for expenditure incurred for Tuition fees paid for children’s education in India, stamp duty / registration charges, principal repayment of housing loan, etc. The total quantum of deduction under this section is upto Rs. 1,50,000 per Financial Year (FY) under this section. Majority of the women taxpayers should aim to avail full benefit under this section which can ultimately reduce their basic tax liability upto Rs. 45,000 (i. e. Rs. 1,50,000*30% - assuming they fall in the 30% tax bracket) 3. Section 80CCD(1B) – Deduction for National Pension Scheme Women taxpayers who contribute to a notified National Pension Scheme, can avail deduction of upto Rs. 50,000 under this section, which is besides the limit of section 80C discussed above. Thus, a salaried woman can effectively save tax on the taxable income upto Rs. 2,00,000 per Financial Year i. e. ₹ 1,50,000 u/s 80C and ₹ 50,000 under this section. 4. Section 80TTA/80TTB – Deduction for Interest on Bank Accounts: Almost every taxpayer including women taxpayers holds a Savings Account in some or the other bank and earns interest on the same. As per section 80TTA, women taxpayers who earn interest on savings account maintained either with a bank or a post office, can claim deduction upto Rs. 10,000 per FY. Further, Section 80TTB of the IT Act provides additional benefit to resident senior women citizens, wherein it enhances the maximum limit of deduction to Rs. 50,000 per FY and also extends the benefit of interest received on time/fixed deposits. Apart from the aforementioned tax benefits, women may also avail the following benefits: 1. Stamp duty concession Stamp duty is a tax that the government levies usually on transfer of assets or property wherein such stamp duty rates varies from state to state. Many states offer concession on stamp duty payable for female property buyers. For instance, Maharashtra government offers concession of 1% to women home buyers, subject to fulfillment of certain conditions. Deduction for such stamp duty paid can be claimed u/s 80C of IT Act subject to the threshold of Rs. 1. 5 lakhs. 2. Home Loan Benefits In order to increase women’s involvement in household financial decisions, many banks and NBFCs offer additional benefits to women borrower like preferential interest rates, customized schemes etc. The deduction for same can be claimed by women u/s 24(b) and 80C of IT Act. Further, the Budget 2023 also proposed a one-time new small savings scheme, Mahila Samman Savings Certificate, which would be made available for a two-year period up to March 2025. This scheme will offer deposit facility upto 2 lakh in the name of women or girls for a tenor of 2 years at fixed interest rate of 7. 5 per cent with partial withdrawal option. The intricate details and tax benefits of the said scheme are still awaited from the Government. Vivek Jain, Head – Investments, Policybazaar. com Women can maximise their savings manifold if they are acquainted with tax saving benefits that they are entitled to avail. Guaranteed returns plan: For women who want to play safe and aren’t willing to take investment risks should opt for guaranteed return plans offering high returns ranging between 7- 7. 5%. While, those who are ready to tackle moderate risk in their investments can choose capital guarantee plans, which are a combination of guaranteed return plans and ULIPs. Those who choose to invest in guaranteed return plans are entitled to a rebate of up to ₹ 1. 5 lakh under Section 80C owing to the life insurance component. Additionally, these plans come with a life cover that is 10X the annual premium, making it worthy and tax-free under Section 10(10)D. However, after 31st March, the returns on traditional plans will be subject to taxation if annual premium exceeds ₹ 5 lakhs. ULIPs: Another option for salaried women employees to park their funds wisely is via investing in insurance-cum-investment products such as Unit-Linked Insurance Plans (ULIPs). With ULIPs, they can fetch high returns ranging between 12-15% under favourable market conditions and enjoy a life insurance cover as well. These plans come with dual tax benefits, one at the time of premium payment and the other at the time of maturity owing to the life insurance component under Section 80C and 10 (10D), respectively. Wisely navigating through these options can help women choose the right investment options and avail tax saving options as per their needs and financial goals. S Ravi, Former Chairman of Bombay Stock Exchange (BSE) As a salaried woman employee, several tax-saving options are available to you in 2023. Here's a guide to help you make the most of them: 1. Invest in a Public Provident Fund (PPF) account – This long-term investment offers tax benefits under Section 80C of the Income Tax Act. Women can also enjoy higher interest rates on their investments in PPF accounts. 2. Opt for a National Pension Scheme (NPS) – Investing in NPS can also help you save tax under Section 80C. Women can also claim an additional deduction of Rs. 50,000 under Section 80CCD (1B). 3. Claim deductions on home loan interest – If you have taken a home loan, you can claim deductions on the interest paid on the loan under Section 24 of the Income Tax Act. Women can also claim an additional deduction of Rs. 1. 5 lakh under Section 80EEA. 4. Utilize medical insurance benefits – As a salaried employee, you may have medical insurance provided by your employer. You can also claim deductions on the premium paid for medical insurance under Section 80D. 5. Claim deductions on education loan interest – If you have taken an education loan, you can claim deductions on the interest paid on the loan under Section 80E. By utilizing these tax-saving options, women salaried employees can significantly reduce their tax liability and increase their savings. Abhijit Roy, Co-Founder & CEO- GoldenPi Technologies The country is witnessing the growth of women employment at a rapid speed. Women can be seen now taking up leadership roles, starting their own businesses and at par with men in all aspects of life. In order to empower women, the government of India however provides a variety of perks and reliefs, such as reduced interest rates on house loans, property tax rebates, and stamp duty concessions. Prior to 2012-13, there were multiple tax slabs for male and female taxpayers. This has now changed with the implementation of equal tax slabs for men and women. Several research studies have shown that women have now started taking total control of their financial decisions and are working towards developing their financial independence. Significant efforts are being put in to understand various modes of savings, tax reliefs and rebates. Here are some of the ways to make the most of the benefits that are available with these tax-savings perks. - Reduction in tax through HRA (House Rent Allowance) - If you pay house rent, you may be entitled to HRA tax benefits. - Paying premium for Health Insurance- Under Section 80D, claim up to Rs. 25,000 a premium paid towards health insurance for yourself, spouse, and dependent children. - Tax-Free Bonds - Women who are looking for long term investment of 10-20 years can confidently opt for Public Sector Organizations bonds where principal and payback are secured. Like other bonds, tax- free bonds do have high returns ranging from 5. 25% to 5. 30% which is predicted to vary with market conditions. - Tax-Saving investment - Claim section 80C deduction upto 1. 5 lakhs - Child Education - Claim tax exemptions on child education and medical allowances provided by the employer. - Mahila Samman Savings- This programme will offer a fixed interest rate of 7. 5%, which is significantly higher than most bank FDs and other well-liked small savings schemes. This will be available for a period of two years, from April 2023 to March 2025. Dr. Kshama Sharma (AVP - Customer Success), Pazcare In today’s world, women are successfully carving niche for them self in every field. They hustle in between work and home without complaining. Many women enjoy financial independence and make the best life decisions. Tax experts, say that income tax rules are generally gender-neutral. According to me every salaried woman shall take control of their finances and of taxes. By making right investment choices. By availing of tax exemptions women can minimise their tax liability. Several lifestyle diseases affecting young adults including Women. Health risks increases as women grow older. Health insurance is must when it comes to health security. Women employees can also avail of tax exemptions on health insurance premiums. Maximum tax limit on health insurance premiums of ₹ 25,000 for self/spouse/dependents and parents and ₹ 50,000 for senior citizens does not just secure future healthcare costs, it also helps salaried employees in saving taxes under 80D. Apart from that, Tax rebate can be taken on salary components of House rent allowance, Leave travel allowance, Education loan interest etc. Investing under 80C schemes is the simplest way to save tax. It will not only save you taxes, but it will provide you with a corpus after a certain period. Women are always known for their saving skills so it’s easier for them to maximize their saving by knowing about the tax benefits they are eligible for. Also, taking control of money matters enhances confidence of an individual. Shilpa Arora, COO and Co-Founder of Insurance Samadhan Tax saving can be a daunting task for many women salaried employees, but it doesn't have to be. As a woman in 2023, it's essential to understand your tax-saving optio