Breaking down India's unique tax exemptions for women
What's the story
India's Income Tax Act provides a plethora of exemptions and deductions intended to reduce the tax burden on individuals. For women, these specific provisions aim to encourage their participation in the workforce and foster financial independence. This article explores the distinct tax exemptions afforded to women in India, highlighting how they can maximize these benefits.
Basic limit
Higher basic exemption limit
Women taxpayers enjoy a higher basic exemption limit compared to men. This means that women can earn up to a certain amount without paying any tax, and this limit is higher than that for men. This is done to provide financial relief and encourage equality. The exact amount of the exemption can vary, depending on the budget announcements for each financial year.
Home loan rebate
Rebate on home loans
The government provides home loan rebates to women to encourage homeownership. If a woman is the sole or co-owner of a property and has availed a loan for its purchase or construction, she is eligible for an additional deduction on the interest paid. This policy not only assists in asset accumulation but also fosters investment in real estate.
Stamp duty
Lower stamp duty charges
Several states in India offer reduced stamp duty charges for women who register property in their names. This discount is typically one to two percent lower than the rate for men, depending on the state. This measure is intended to empower women and encourage gender equality in asset ownership by making it more attractive for women to register property in their names.
Savings incentive
Savings scheme benefits
The government provides several savings schemes with attractive benefits for women, to promote a culture of saving and investing among them. These schemes typically offer higher interest rates or tax advantages to women investors. For example, schemes like Sukanya Samriddhi Yojana are specifically designed for saving towards a girl child's future education and marriage, offering high-interest rates as well as tax deductions under Section 80C of the Income Tax Act.
Health insurance deduction
Deductions on health insurance premiums
Women taxpayers are eligible for deductions under Section 80D of the Income Tax Act for premiums paid on health insurance policies for themselves and their families. This benefit motivates them to invest in health insurance policies by offering financial advantages in the form of tax savings. The deduction limit depends on whether they are insuring only themselves or also including family members under the policy coverage.