International Women's Day: What tax benefits, provisions are available for women; check details

In India, financial independence and security for women receive a significant boost through various tax benefits. Recent years have seen significant advancements in women's financial inclusion. They are increasingly taking ownership of their financial destinies and making autonomous choices regarding investment, tax savings, property possession and starting their own venture. 

On International Women's Day, we look at various tax benefits and incentives designed to empower women in achieving financial security. These incentives can support women in savings schemes, owning homes, growing businesses, and planning for healthcare needs.

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Women as business leaders

Women entrepreneurs, in particular, can take advantage of the presumptive taxation scheme under Section 44AD, which simplifies tax filing by allowing them to declare their taxable income as a percentage of their turnover. The scheme provides a 6% rate for digital transactions and an 8% rate for cash transactions. This scheme extends the turnover limit to Rs 3 crore for businesses with predominantly digital transactions. According to Mundra, "This scheme helps women entrepreneurs reduce tax burdens while easing financial management.” Such provisions are designed to enhance financial autonomy for women in business, enabling them to focus more on growth and innovation.

Healthcare and insurance

Health insurance also plays a pivotal role in ensuring financial security for women. Under Section 80D, women can claim tax deductions on health insurance premiums up to Rs 25,000 for themselves and their families. If they insure senior citizen parents, the deduction increases to ₹50,000. Mundra emphasised, "Health insurance deductions not only save tax but also ensure financial security during medical emergencies.” These deductions not only reduce the tax burden but also provide a safety net in times of health crises, thus fostering a sense of security among women.

Savings for girlchild

The Sukanya Samriddhi Yojana (SSY) is another important scheme that benefits women significantly, focusing on securing the future of girl children. Under this scheme, contributions qualify for deductions under Section 80C up to Rs 1.5 lakh, and both interest and withdrawals are tax-free. SSY offers the triple exemption benefit — investments, returns, and withdrawals are all tax-free — making it a powerful tool for securing a daughter’s future. 
Although women do not receive additional tax benefits beyond the general limit with the Public Provident Fund (PPF), both SSY and PPF serve as effective long-term savings instruments, ensuring financial wellbeing for women and their families.

Home, education loans

When it comes to home and education loans, women borrowers can avail themselves of tax deductions similar to all taxpayers. Section 80C allows a deduction of up to Rs 1.5 lakh on the principal repayment of home loans, while Section 24(B) permits a deduction of up to Rs 2 lakh on interest payments. 

Education loans qualify for deductions under Section 80E, with no upper limit on interest payments. While these provisions are not exclusive to women, they offer substantial relief and encourage financial planning. This enables women to manage their finances efficiently, contributing to overall economic stability and growth.

Incentives for retirement

Furthermore, retirement planning is fortified through the National Pension System (NPS) and Employee Provident Fund (EPF). NPS offers an additional deduction of Rs 50,000 under Section 80CCD (1B), supplementing the Rs 1.5 lakh deduction under Section 80C. EPF contributions also qualify under Section 80C. NPS and EPF provide a strong safety net, ensuring women maintain financial stability post-retirement. These schemes enhance the financial resilience of women, supporting them in achieving financial goals and securing a comfortable future.