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Income Tax Slab for Women: Exemptions and Deductions

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With the increasing participation of women in the workforce, their economic contributions have become an integral part of India’s growth story. As more women take on professional roles and become financially independent, understanding the nuances of income tax regulations becomes essential. The income tax for women in India recognises the significant role played by women in the economy and offers specific exemptions and rebates to empower them further. Here’s a comprehensive guide that sheds light on the income tax slabs for women and the tax exemptions they can claim. This will enable them to make informed decisions, optimise their tax planning strategies, and maximise their savings.

What is an Income Tax?

Income tax is a type of tax imposed by the government on the income earned by individuals and businesses. Any citizen whose annual income exceeds the basic exemption limit stated by the Government of India must file income tax returns. Individuals whose income does not exceed the basic exemption limit can still file income tax returns and claim TDS refunds. The Income Tax Act of 1961 governs the taxation system in India.

The taxpayers must file their income tax return annually and within the specified period. The government uses these taxes to develop infrastructure around the country, deliver education and healthcare to the underprivileged section of society, provide subsidies to the farmers, and run other welfare schemes for the citizens.

Income Tax Slab for Women – For Individual Taxpayers, Senior Citizens and Super Senior Citizens

Until FY 2012-13, women taxpayers in India enjoyed higher tax exemption limits than men. However, the Indian government abolished this system and introduced a common tax slab for men and women from FY 2013-14.

The income tax slabs are revised from time to time, especially during the budget. After revisions in 2022 and 2023, the income tax slabs have been revised again in the Union Budget 2024 to provide more financial relief to taxpayers in India. Let’s look at the new tax slab for FY 2024-25 and AY 2025-26.

A few points to keep in mind:

1. Under the new tax regime (Budget 2024), the standard deduction has been increased from INR 50,000 to INR 75,000.

2. The new tax regime has also increased the deduction for family pension from INR 15,000 to INR 25,000.

The following table will tell you how the tax slabs changed after the Union Budget 2024.

Although the new tax regime will be the default one for FY 2024-25, the old one is not being discontinued. Taxpayers can choose between the old and new tax regimes while filing their income tax returns.

As per the old tax regime, the tax slabs depend on the age and income of the taxpayers.

• Individuals below 60 years of age

• Individuals between 60 to 80 years of age (senior citizens)

• Individuals above 80 years of age (super senior citizens)

The following was the old tax regime for women and other taxpayers in India:

In addition to the taxes, women and other taxpayers whose annual income exceeds the specified threshold limit must pay a surcharge on the total tax amount. The surcharge is an additional charge paid on income tax.

The following table compares the surcharge rates under the old and new tax regimes.

Deductibles and Exemptions for Women Taxpayers

The following deductions and exemptions are available for women taxpayers under the old and new tax regime:

The following table will explain the deductions women taxpayers can claim on investments under different Sections of the Income Tax Act (1961). However, these exemptions are not applicable under the new tax regime except 80CCD(1B):

Tips for Women Taxpayers

Here are some tips that can help women taxpayers plan their finances and taxes —

1. Select the right tax regime:

When filing your income tax returns, you can choose between the old and new tax regimes. While the tax rates are higher under the old one, it allows certain important deductions that are not available under the new tax regime. Hence, do your calculations, consider your savings, investments and loans, and review your priorities before zeroing in on a tax regime.

2. Invest wisely:

Women taxpayers can enjoy deductions and exemptions on certain investments, such as National Savings Certificate, life insurance premiums, fixed deposits, Sukanya Samriddhi Yojana, Mediclaim policy or health insurance premiums, and ULIP. Therefore, choosing the right investments can benefit you in the long run and also ensure notable tax deductions.

3. File your IT returns:

Even if your income is below the basic exemption limit, file your income tax returns to claim TDS refunds.

Government initiatives or policies benefiting women taxpayers

The following are some government initiatives and policies that can benefit women taxpayers in India —

1. Sukanya Samriddhi Yojana (SSY) :

If you are a salaried woman with a daughter, you can invest in Sukanya Samriddhi Yojana to save for your child’s future and reduce your income tax liabilities. Under Section 80C of the Income Tax Act, you can claim an annual deduction of up to INR 1.5 lakhs on this investment.

2. Mahila Samman Savings Certificate Scheme:

This is a small savings scheme supported by the Government of India. The account can be opened in the name of a girl child or woman. The interest received under the scheme is TDS-free. The scheme has a tenure of 2 years and offers an interest of 7.5% per annum on deposits. The minimum and maximum deposits under this savings certificate scheme are INR 1000 and INR 2 lakhs, respectively.

3. Public Provident Fund:

Public Provident Fund, or PPF, is a popular investment that requires a minimum deposit of INR 500. The maximum annual contribution under this scheme is INR 1,50,000. The scheme has a tenure of 15 years, and the current interest rate is 7.1%. PPF investments, earnings, and withdrawals are exempted from income tax under Section 80C of the Income Tax Act.

4. National Savings Certificate:

The National Savings Certificate, or NSC, is a fixed-income investment scheme for the citizens of India. It can be taken through the post office by depositing a minimum amount of INR 1,000. The scheme offers a guaranteed return of 7.7%, and investors can claim tax deductions on the deposits under Section 80C of the Income Tax Act.

5. Senior Citizen Savings Scheme:

This retirement benefit program is backed by the Government of India. Senior citizens, both men and women, can invest a lump sum in this scheme and enjoy regular income. Investments under this scheme can be done both individually or jointly. SCSS offers an interest of 8.2% per annum and taxpayers can claim deductions on investments under Section 80C of the Income Tax Act.

Please note that whether you invest in one or all of the above, the maximum deductions you can claim under Section 80C is INR 1,50,000.

FAQs

1. Are there different tax slabs for women taxpayers in India?

The income tax slabs for men and women are the same in India. All taxpayers are treated equally in the country, irrespective of their gender.

2. How is the old tax regime different from the new one?

The old tax regime has different tax slabs and rates than the new one. While the new one offers lower tax rates, the old one provides more deductions and exemptions to taxpayers.

3. Which tax regime should women taxpayers choose – old or new?

The choice between the old and the new tax regime may vary from one taxpayer to another. You can use the Income and Tax Calculator on the Income Tax Portal to get estimates of your tax liabilities under both regimes. You can then choose one that offers more tax benefits.

4. Can a housewife file her income tax returns?

If a homemaker earns income from any source, such as interest on the savings account, fixed deposits, etc., she must file income tax returns. This is particularly important if her income exceeds the basic exemption limit of INR 2.5 lakhs under the old tax regime and INR 3 lakhs under the new one.

5. What is the maximum deduction limit under Section 80C of the Income Tax Act?

Taxpayers can claim a maximum deduction of INR 1.5 lakhs under Section 80C of the Income Tax Act. This includes investments made in National Savings Certificate, PPF, Equity Linked Savings Scheme, Senior Citizen Savings Scheme, etc.

Conclusion

To sum up, India follows a uniform tax structure. Therefore, the income tax slab for women is the same as that for men in the country. Although there are no specific deductions exclusively for women, they can still claim deductions under different sections of the Income Tax Act, as mentioned above. For instance, women can avail of tax exemptions for investing in a Mediclaim Policy or a women’s health insurance plan, like a maternity insurance policy. So, before you file IT returns and plan your finances, ensure you know all the applicable exemptions.

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

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