Best Income Tax saving options for women salaried employees in 2023

International Women’s Day 2023 | Income Tax Saving Guide for Salaried Women Employees in 2023: Tax saving rules and options women employees should know to maximise their savings.

tax saving guide for women employees
Know how salaried women employees can maximise their tax savings. Representational image

International Women’s Day 2023: The number of salaried women employees in India is increasing across sectors. They can be seen competing against men, even doing better in many cases, in all fields of life. With the increasing number of women in formal employment, their incomes are also rising, which makes it important for them to do their tax planning wisely to maximise their savings.

Tax experts say that income tax rules are generally gender-neutral. Prior to 2012-13, there were different tax slabs for men and women taxpayers. But now there are common tax slabs for both genders.

“Earlier, there were different slabs of taxes for women and men. However, since 2012-2013, a common tax slab has been applicable to both men and women,” says Abhishek Soni, Co-founder and CEO of Tax2win, a Fisdom company.

Sujit Bangar, Founder, further elaborates that before the fiscal year 2012-2013, women taxpayers in India were granted favourable tax slabs, but this has since been eliminated. However, tax exemptions and rebates are now equal for both men and women.

Also Read: Tax Calculator: How much tax you will have to pay on Rs 9 to Rs 15 lakh income

“Being a salaried employee, every woman shall take control of their finances and of taxes. It’s important to be aware of exemptions and deductions available in respect of certain investments or certain specified payments. Being in control of money matters enhances confidence,” says Bangar.

In separate e-mail conversations with FE PF Desk, both tax experts emphasized that it is imperative for women salaried employees to comprehend the income tax regulations to ensure accurate tax payments and maximize tax-saving opportunities.

While women are always known for their saving skills, it will be easier for them to maximize their savings by knowing the following tax benefits they are eligible for.

Repayment of Home Loan

If you and your spouse have taken a joint home loan, you can both avail of the tax deductions on principal and interest components, you can claim tax deductions up to Rs 1.5 lakh under Section 80C on principal repayments and Rs 2 lakh towards interest repayments under Section 24.

“As a first-time buyer, you can also claim additional tax benefits up to Rs. 50,000 under section 80EE or Rs.150000 under section 80EEA on the interest portion of the loan you repay if you fulfill certain conditions,” says Soni.

“Section 80EE allows for an additional tax benefit of up to Rs. 50,000 for first-time homebuyers with a loan value not exceeding Rs. 35,00,000 and property value of less than or equal to Rs. 50,00,000,” adds Bangar.

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Savings Account

Under Section 80TTA, tax deductions up to Rs 10,000 is allowed on the interest earned on a savings account. Several banks offer plans for women with other benefits like zero balance accounts and others. For senior citizen women, deduction under section 80TTB is also available up to Rs 50,000 for interest on term deposits and savings bank accounts.

HRA (House Rent Allowance)

HRA is a component of the salary structure offered by the employer. And you are eligible for tax benefits if you are paying house rent.

The exemption for HRA benefit is the minimum of:

  • The total amount of actual HRA received
  • 50 percent of salary (Basic salary + Dearness Allowance) if living in metro cities( or 40 percent for non-metro cities
  • Excess of rent paid annually over 10% of annual salary (Basic salary + DA)

Education Loan

Section 80E provides a tax deduction on the “interest component” paid on a loan taken for higher education by an individual assessee or on behalf of their spouse or children. Under Section 80E, tax benefits can also be claimed on the education loan’s interest payment. This deduction can be claimed for a maximum of 8 years.

Health Insurance

Experts say that health insurance does not just secure future healthcare costs, it also helps salaried employees in saving taxes.

“Under Section 80D, women can claim up to Rs. 25,000 on the premiums paid towards health insurance for yourself, your spouse, and your dependent children. A separate deduction of Rs. 25000 for parents’ insurance is available if they are less than 60 years of age or Rs. 50000 if parents are senior citizens (60 years or above). If parents are senior citizens (60 years or above), a person can also claim a deduction of Rs 50,000 for medical expenses,” says Soni.

Tax-saving investment options

There are also various options for salaried women employees to invest and save on their taxes. These investments are tax deductible under section 80C.

  • Public Provident Fund (PPF)
  • Equity Linked Saving Scheme (ELSS)
  • Employee Provident Fund (EPF)
  • Tax-Saving Fixed Deposits (FDs)
  • National Saving Certificate (NSC)
  • Sukanya Smriddhi Yojana (SSY)
  • Unit Linked Insurance Plan (ULIP)
  • National Pension Scheme (NPS)

Income Tax Calculator

You can use the following tax calculator to maximise your tax savings.

Women employees can also avail of tax exemptions on child education and medical allowances received from their employers.

“Furthermore, food coupons provided by companies can reduce taxable income by Rs. 26,400 per annum, and the Sukanya Samriddhi Yojana is an excellent option for women to invest for their daughter’s future while receiving tax exemptions on interest accruals and maturity amounts,” says Bangar.

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First published on: 06-03-2023 at 13:16 IST
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