Union Budget 2023 for women: Is there a case for special income tax exemptions, slabs and benefits for women? Finance Act 2012 abolished the differential tax slabs that were in vogue for women and introduced a unified tax structure that was common for both men and women. Until then, women had slightly higher tax benefits vis-à-vis men. Experts are of the opinion that to promote the future of working women, it is important to give them additional tax benefits.
As of now, individuals be it men or women are subject to the same income tax slab rates. The differential tax slabs are applicable only with respect to the age of the individuals and not with respect to gender
Income Tax for Women
Sudhakar Sethuraman, Partner, Deloitte India is of the view that presently there is a strong ask for reducing the income tax slab rates and/or widening the income tax slabs. “Instead of meeting this demand for all individuals, perhaps the Finance Minister could extend this benefit only to women,” he tells TOI.
“Going by the notion that women are better in savings, a benefit here will forge a path that is fiscally motivating and encouraging for the women of India. Considering India’s outlook and striving towards women empowerment and women in leadership with various schemes such as Ujjwala scheme, Beti Bachao Beti Padhao, Sukanya Samriddhi Accounts, and Sainik Schools, to name a few, tax benefits are just another step to ensure progress and development of not only women but also of the nation,” Sethuraman said.
Kuldip Kumar, Former National Leader – Global Mobility Practice, PwC India says that extending higher tax relief to women taxpayers is necessary to strengthen their financial independence.
“During Covid-19 pandemic, several women lost their husbands who were sole earners in the family and thus, such women now have the financial responsibility to raise their children. Such single women parent tax payers need to be given a separate deduction/exemption to increase their disposable income,” Kuldip Kumar tells TOI.
He recommends the following:
These proposals are also aligned with the government’s other schemes like Beti Bachao Beti Padhao and/or Ujjawala Yojana etc. for the women section of society, he points out.
Akhil Chandana, Partner, Grant Thornton Bharat points out that women form approximately 48% of India’s total population. “However their participation towards the country’s economic growth has been limited due to less opportunities and higher domestic responsibilities,” he notes.
Chandana expects Union Budget 2023 to increase the income tax slabs for women and introduce certain additional tax benefits in terms of providing higher tax deductions.
Tax Benefits With Separate Income Tax Benefits for Women
|Particulars||Existing (Old Regime)||Proposed* (Old Regime)||Existing (New Regime)||Proposed* (New Regime)|
|Gross total income||750,000||750,000||750,000||750,000|
|Net Taxable Income||600,000||550,000||750,000||750,000|
|Income tax on above||32,500||15,000||37,500||25,000|
|Total tax liability (rounded off)||33,800||15,600||39,000||26,000|
|Tax Savings (INR) to employee||18,200||13,000|
*Increased deduction u/s 80C to Rs 2 lakhs and reduced tax rate to 5% upto Rs 7.5 lakhs of income
Source: Grant Thornton Bharat
Presently, under the old tax regime, 5% tax is applicable on income above Rs 2,50,000 but upto Rs 5,00,000 and 20% tax rate is applicable on income above Rs 5,00,000. He recommends that the 5% tax rate should be applicable for income upto Rs 7,50,000 for female taxpayers. Similarly, under the new tax regime, 10% tax rate is applicable on income above Rs 5,00,000 but upto Rs 7,50,000. This should also be 5% for income upto Rs 7,50,000 for female taxpayers.
“Further, the government should also increase the Section 80C deduction limit from Rs 1.5 lakhs to Rs 2 lakhs. This move would certainly help the females of our county in building an independent future for themselves by having more disposable income in their hands,” he adds.