Home Articles 4 tips women investors should keep in mind when planning taxes

4 tips women investors should keep in mind when planning taxes

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A Smart woman always takes a smart step, especially when it is about investment. They spend well on certain things and ignore the unnecessary things. Presently, the attitude of women investors is truly aligned with the male investors in the country. 

Transforming the notion and so the face of investing is none other than the new age women. Additionally, with spirit and unbridled enthusiasm, these women investors are successful entrepreneurs who have an intense taste in creativity and innovations. And at the same time, they leave no stone unturned while making a sustainable ecosystem for further generations of startup entrepreneurs.

No matter, you are a self-employed and salaried woman, there are some tax-saving tips and tricks that you can consider to avail benefits of tax –

Section 80C of the Income Tax Act, 1961 – This section opens for removal of up to  Rs, 1, 50,000 for investing in the option of tax-saving. Here are some investment options accessible within this section are :

  • Employee Provident Fund ( EPF)
  • Life Insurance Premium
  • 5 -year tax – saving fixed deposit
  • Public  Provident Fund (PPF)
  • Equity Linked Savings Scheme ( ELSS)
  • National Savings Certificate ( NSC)
  • Tuition fees of children

This abstraction has been set either for investment in one instrument or for investment in various options. However, the increased deduction shouldn’t be reached by Rs. 1,50, 000. In the case of working women, the EPF and Pension are already taken care of. ELCC or NSC is a good option for investment for them.

Home Loan –  In Section 80C of the Income Tax Act, enables an exception of up to Rs. 1,50,000 every year for the basic component of your home loan. On the other side, Section 24 of the Income Tax Act, provides a tax removal of up to Rs.2 lakhs each year on the interest component. The Budget of 2016 presents an extra deduction of Rs.50,000 on the interest component of your home loan ( provided it is your initial residential property purchase, the worth of the house is not more than Rs 50 lakhs and the amount of loan will not cross over Rs 35 lakhs.

Health insurance – Income Tax Act 1961 of section 80 D enables a tax deduction of around Rs. 25,000 every year for paying a health insurance premium including an extra deduction of Rs.5000 for purchasing policies through or for senior citizens. This advantage is useful for your own health insurance premium and the premiums paid for your spouse, parents, and children( not required but depends).

Sukanya Samridhi Yojna – This scheme allows you to deposit up to Rs.1,50,000 every year and get a fixed return of 9.2 %. However, this could be only available for a girl child which comes under 10 years of age. The maturity amount and the interest earned are tax-free. There will be a lock-in for this investment. This project is will finish until the girl turns 21 years of age and gets hitched ( which might happen earlier).  And you can apply for a premature withdrawal of up to 50% for higher education only once the girl turns  18 years of age.

Authored by Mr. Amit Gupta, MD, SAG Infotech

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