The Indian Taxation Structure is designed in such a manner that it promotes protection of the minor groups along with maintaining equilibrium in operations.
The tax payer is mainly allocated into three major forms which involve Men, Women and Senior Citizens and Very Senior Citizens. Today, we shall take an insight into the taxation structure for the women and should develop an idea about their taxation basis.
In this article we will discuss about tax planning tips for resident women/female assessee/women income tax payers.
Basic Exemption for A.Y.2018-19 & A.Y. 2019-20 for Female Assessee
A resident women in India is currently enjoying an exemption upto Rs. 2,50,000. This exemption rate is applicable to all the assessees. For resident women who are above the age of 60 but below the age of 80 are known as senior citizens, they enjoy an exemption upto Rs. 3,00,000. Additionally, resident women who are above the age of 80 have also been brought under the purview of taxation and are known as very senior citizens. They enjoy an exemption upto Rs. 5, 00, 000.
Apart from this basic exemption, the essence of tax panning is such that resident women can also save some additional amount by way of deductions which shall further reduce their tax liability. The whole structure can be broadly categorized into two distinct factors such as:
Deduction u/s 80 C
- The section 80 C is a very powerful area of operation which provides people to save a handful amount of tax liability by way of investment. The schemes are distributed among various channels which includes investment in:
- Public Provident Fund (PPF): Here people are free to invest according to their desire and can obtain a maximum deduction of Rs. 1,50,000.
- National Savings Certificate (NSC): This is another option to ensure that funds are channelized into productive interest that provides high return along with being available for deduction.
- A 5- year Fixed Deposit
- Life Insurance Corporation policies (LIC)
- Equity Linked Savings Scheme (ELSS)
- Pension Plans
- Employee’s Provident Fund (EPF), etc.
In this context, it should be noted that only a gross amount of Rs. 1,50,000 (A.Y. 2018-19 & A.Y. 2019-20) would qualify as maximum deduction form this section as this is the overall permissible limit.
Contribute to NPS: NPS stands for New Pension Scheme was has recently been initiated by the Government under which investors can claim a deduction as a have a Tax free NPS return, however, withdrawal under such system is till taxable. You can get extra deduction for contribution to NPS up to Rs.50,000/-.
The maximum deduction as an aggregate of section 80C,80CCC & 80CCD(1) should not exceed Rs. 1,50,000 but after including section 80 CCD(1B), total deduction limit becomes Rs. 2,00,000.
Deduction u/s 80 D to U
These are the remaining sections which jointly provides various threshold limits for assesses to ensure that they can save some further amount from their tax liability. This includes investment in various forms of sources such as:
- Health Insurance: Investment in health insurance plan is exempted upto Rs. 25, 000 under the section 80 D. The limit is raised upto Rs. 30, 000 for senior resident women. More about medical Insurance deduction. You can also get deduction of parent’s mediclaim if paid out of your own funds. The expenses on preventive health checkup is also eligible for deduction under section 80D.
- Education loan: The benefit of repayment of education loans are available under the section 80 E where one can claim exemption for the expenditures made for repayment for education loans.
- Donations to research and development programme along with donation to political parties are exempted under section 80 G which can range from 50% to 100% of the donations made.
Apart from this, see articles on tax planning and how to save tax?