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Tax Benefits for Women: What Will Budget 2024 Offer?

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Ladies and gentlemen, the Union Budget 2024 is right around the corner, and with it, interest has again piqued in the hopes of some special announcements for women in India this time. Giving them additional financial benefits would be a nice way to empower women among other measures. With Finance Minister Nirmala Sitharaman at the helm, anticipation for budgetary tax benefits in the upcoming budget for women has risen.

Current Tax Benefits Available to Women

Ahead of getting into the wishlist for Budget 2024, let's take a quick look at what's currently on the table for women with regards to budget tax benefits. Right now, women get the same exact tax exemptions that every other person gets.

  1. Standard Deductions: Women, like all other taxpayers, can avail of the 50,000 INR standard deduction. This reduction in their taxable income at this basic level does keep their tax rate at least somewhat under control.
  2. nvestment deductions: Women can claim up to a maximum of 1.5 lakhs under section 80C for deductions made by investing in some funds prescribed under savings and children's education. A few of the examples of such funds include PPF, EPF, NSC, life insurance funds.
  3. Deductions in Health Insurance: Women can get deductions under section 80D by paying for their health insurance policies. For policies on self and family—spouse and children—the maximum limit of deduction allowed is 25,000 INR, and the amount is 50,000 INR for policies on parents.
  4. Maternity Benefits: This may not be a budget tax relief as such, but the Maternity Benefit (Amendment) Act offers a healthier working environment for women by offering them the much required paid leave. Since this indirectly helps financial well-being for them, we may count this too.

The government has also made efforts in the form of financial welfare schemes. Take the Pradhan Mantri Vaya Vandana Yojana for example. It offers senior women citizens higher interest rates on their investments. The Sukanya Samriddhi Yojana aiding the futures of girl children, has also received significant funding. Although these efforts are to be appreciated, there is definitely room for much more.

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Expectations from Budget 2024: Potential Tax Reforms for Women

So, what could be different for women in the upcoming budget? Here are some ideas that were found floating around on the web and we felt that these changes could indeed make a difference.

  1. Higher Basic Exemption Limit for Women: Pushing up the basic exemption limit for women is easily the most straightforward thing to do to help them financially. For instance, increasing the 2.5 lakh INR basic exemption to 3 lakhs, for resident women under 60 years could be a great start.
  2. More Deductions for Working Women: Other ways of reducing their tax liability could be through increase in deductions allowed on women taxpayer's income. Deductions involving childcare, education, and even work from home, could only be reasonable and be helpful to working women.
  3. Higher Deductions under Sec 80C: The maximum exemption provided for investments is, as of now, restricted to 1.5 lakhs INR. The government should increase this limit in case of women to give them a better incentive to invest more.
  4. Tax incentives to women entrepreneurs: As the start-up culture is gaining momentum in India, the special tax concessions to the female entrepreneurs could be the applause that motivates them to push further. This shall also promote economic growth indirectly.

Impact on Women's Financial Planning and Investments

Now, what all this could amount to for women and their financial planning is left to one's understanding. If reforms such as these find a place in the union budget 2024 through Nirmala Sitharaman, then it would turn out to be a magic wand for women's financial freedom.

  1. Higher basic exemption limits and more deductions mean more disposable income. More savings, more investments, or just more spend on herself—because self-care is key, isn't it? Therefore, enhanced benefits under Sec 80C will be more contributory to long-term savings and investments, setting women up for a more secure financial future.
  2. Higher savings and better investment options can act as a backup for women in case any financial emergency occurs. They can be better equipped to deal with these situations if they hold funds that can liquidate.
  3. It may also attract more women into the workforce and attract them to stay longer, fully aware that they are backed in making more efficient balancing between work and family responsibilities. This therefore would appeal to increased economic participation and contribution from women.
  4. Tax incentives for women entrepreneurs translate into more resources being reinvested in their businesses, which have the potential to grow, accompanied by employment.

Generally, all of these would offer a much more conducive environment for financial growth instead of immediate budget tax relief for women.

Conclusion

Therefore, from this totally revamped outlook, Budget 2024 comes with much hope for women. Given the right reforms, there can be big-ticket budget tax benefits accruing to women under Finance Minister Nirmala Sitharaman, right from enhanced exemption limits to higher deductions and even various incentives quintessentially for the women entrepreneurs.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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Frequently Asked Questions

What are the current tax benefits available specifically for women?

Answer Field

Women can avail 50,000 INR standard deduction and up to 1.5 lakhs INR deduction under Section 80C, which consists of investments in things like PPF, EPF, and life insurance. They are also allowed deductions for health insurance paid under Sec 80D and have higher interest rates on various schemes like Pradhan Mantri Vaya Vandana Yojana and Sukanya Samriddhi Yojana.

How might Budget 2024 impact tax exemptions and deductions for women?

Answer Field

Budget 2024 may increase the basic exemption limit, enhance deductions under Section 80C of the Income Tax Act, and bring in newer deductions for working women's schemes relating to expenditure incurred on issues like childcare and education. This will ensure better tax relief and incentive for savings and investments.

Will there be any new tax-saving schemes exclusively for women in Budget 2024?

Answer Field

Some of the newer tax-saving schemes would be increased deduction limits for investments done exclusively by women, incentives for women entrepreneurs, etc., along with special saving schemes that promise comparatively higher returns or additional tax benefits.

Are there any changes expected in the tax rates applicable to womens income?

Answer Field

The new budget could readjust the tax slabs to be less burdensome for women, thus minimising their overall tax burdens and increasing disposable incomes.

How can women optimise their financial planning considering potential tax reforms?

Answer Field

Women should be very conscious about the announcements that are made in the budget and think of revisiting their investment strategies to leverage maximum new deductions and credits. One can take help from a financial advisor to make appropriate changes in their financial planning concerning the newly announced tax benefits.

What steps should women take to benefit from the tax policies announced in Budget 2024?

Answer Field

Women have to undergo budget updates, take stock of the current investments, and rebalance financial plans in order to use new tax benefits. For maximising tax savings and financial growth, interacting with experts on investments and using tax-saving tools becomes very important.

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