For everyone, financial management includes tax planning. It is crucial to take advantage of the tax incentives and exemptions available to women in India by carefully managing your taxes. Women may maximise their income, save money, and attain their financial objectives with the aid of effective tax planning.
Here are some thoughts on tax planning for women from Saakar S. Yadav, the founder and director of myITreturn.com.
Standard Deduction: Women can claim a standard deduction of up to INR 50,000 on their income.
Section 80C: Invest up to INR 1.5 lakh in tax-saving instruments like the Public Provident Fund (PPF), National Savings Certificate (NSC), and Employee Provident Fund (EPF).
Section 80D: Deduct premiums paid towards health insurance policies for self, spouse, children, and parents.
Section 80G: Avail deductions on donations made to charitable institutions.
To maximise tax savings and grow wealth, consider the following investment options:
Sukanya Samriddhi Yojana (SSY): If your daughter is aged 10 years or below, you can opt for Sukanya Samriddhi Yojana and make yearly investments in your daughter’s name until she attains 21 years of age. This is an excellent way to save up for the future of your children as it offers a high-interest rate, and it also provides tax benefits under Section 80C.
Equity-Linked Savings Scheme (ELSS): Invest in ELSS mutual funds to enjoy tax benefits under Section 80C.
Public Provident Fund (PPF): PPF offers tax-free interest and long-term wealth creation.
National Pension System (NPS): NPS provides an additional deduction of up to INR 50,000 under Section 80CCD(1B).
Plan for Home Loans
Women who avail home loans can enjoy additional tax benefits:
Section 24: Claim deductions on home loan interest of up to INR 2 lakh per year.
Section 80EEA: First-time homebuyers can claim an additional deduction of up to INR 1.5 lakh on home loan interest.
Consider Investing in Tax-Free Bonds
Since the interest generated on these bonds is not subject to income tax, they represent a sound investment choice. These government-backed companies aresuing the bonds offer reliable income with little risk.
Analyse your options for retirement planning
To achieve financial stability in the long run, women should prioritise retirement preparation. While accumulating a retirement fund, options like the Employee Provident Fund (EPF) and National Pension System (NPS) provide enticing tax advantages.
For Indian women to maximise their income, preserve money, and reach their financial objectives, effective tax planning is essential. Women may efficiently arrange their taxes while building wealth by utilising tax exemptions, deductions, and investment choices across tax sections. Recall to keep up with the most recent tax legislation and seek out specialists for tailored counsel. Women may pave the route to financial security with a well-thought-out tax planning approach.
