Income tax for women

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Knowledge Partner: Grant Thornton Bharat

The tax liability for individual taxpayers is determined as per the applicable income-tax slabs and rates. Senior citizens are eligible for beneficial slab rates. Till FY 2011-12, women taxpayers were eligible for beneficial tax slabs. However, with effect from FY 2012-13, the Government introduced common income tax slabs for both men and women. Also, there are no special tax deductions/exemptions which are available to a women taxpayer.

The present slabs and tax rates applicable to the individual taxpayer (both men and women) is mentioned below:

Income Tax Slabs For Women & Men: Old & New Regime

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Income Tax Slab Old Tax Regime     New Tax Regime
  Resident Individuals (aged less than 60 years of age) and NRI Resident Senior Citizens (60 to 80 years) Resident Super Senior Citizens (above 80 years) Applicable for all individuals
Upto INR 2,50,000 NIL NIL NIL NIL
INR 2,50,001 to INR 3,00,000 5% NIL NIL 5%
INR 3,00,001 to INR 5,00,000 5% 5% NIL 5%
INR 5,00,001 to INR 7,50,000 20% 20% 20% 10%
INR 7,50,001 to INR 10,00,000 20% 20% 20% 15%
INR 10,00,001 to INR 12,50,000 30% 30% 30% 20%
INR 12,50,001 to INR 15,00,000 30% 30% 30% 25%
Above INR 15,00,000 30% 30% 30% 30%

The above income-tax liability is further increased with surcharge where the income exceeds the threshold limits. The rates of surcharge are mentioned below:

Income Tax Slabs: Surcharge Rates

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Total income Surcharge rate
Above INR 50 Lakhs and upto INR 1 Crore 10%
Above INR 1 Crore and upto INR 2 Crore 15%
Above INR 2 Crore and upto INR 5 Crore 25%
Above INR 5 Crore 37%

In addition to above income tax and surcharge, health and education cess of 4% is charged on the total income tax (including surcharge). Further, in case of women taxpayers having income up to Rs 5 lakhs, tax rebate upto Rs 12,500 can also be availed.

It is important to note that the taxpayer opting for new tax regime must forgo the commonly available deductions and exemptions like house rent exemption, deductions under Section 80C, 80D etc.

Budget 2023 expectations for women taxpayers

The existing law provides various deductions /exemptions to an individual taxpayer to reduce the overall tax burden and increase savings and disposable income. However, it is important to note that there is no specific deduction /exemption which is available to the women taxpayers. With the Union Budget 2023 around the corner, there is an expectation from the government that, to support working women and increase their contribution towards country’s economic growth, certain additional tax benefits be introduced.

The following suggestions can be considered in this regard:

  • Increase in limit of Section 80C deduction: Amongst the other specified investments /expenses, repayment of housing loan and payment of life insurance premium is also one of eligible investment /expense for claiming 80C deduction. The limit to claim tax deduction for these two payments should be increased or separate deduction limit should be specified for these two payments for women taxpayers which does not form part of overall tax deduction of Rs 1.5 lakhs. This move would incentives and encourage independence among women to own a house and have a guaranteed life cover.
  • Increase in limit of Section 80TTA deduction: The present law provides for deduction of savings bank interest income upto Rs 10,000 only. The limit should be increased for women taxpayers to promote savings and financial independence.
  • Tax benefits for expenses incurred on pursuing higher education and professional/vocational courses: Women taxpayers should be allowed an additional deduction for expenses incurred on higher education and professional /vocational courses pursued by them. Further, scope of section 80E should be increased to include the principal repayment of loan taken for pursuing such educational courses as eligible deduction. The existing section 80E only allows deduction of interest expense on such loan.
  • Increase the basic exemption limit: The basic exemption limit for women taxpayers should be increased from Rs 2,50,000 to Rs 3,00,000.

The above measures would go a long way in helping the women taxpayers in our country in building an independent future.