As the end of the financial year approaches, many rush through the income tax filing process, often making hasty and suboptimal decisions. However, by planning taxes at the start of the financial year, you can ensure a smoother, stress-free year-end. Tax planning is not just for men; it is equally crucial for working women. A well-thought-out approach can make your financial journey more organized and beneficial in the long run.
Is a Housewife Required to File an Income Tax Return?
A housewife must file an income tax return if her income from any source, such as interest, dividends, or tuition, exceeds the basic exemption limit. The exemption limit is ₹2,50,000 under the old tax regime and ₹3,00,000 under the new tax regime.
Tax Planning Basics
Tax slabs for women are the same as those for men. Understanding your tax bracket can aid in better planning and maximizing savings.
Effective Tax-Saving Options for Women
Sukanya Samriddhi Yojana (SSY): Secure Your Daughter’s Future
This government-backed savings scheme is designed specifically for the girl child, encouraging parents to save for their daughter’s education and marriage expenses. SSY falls under the EEE (exempt, exempt, exempt) tax category, meaning investments, earnings, and withdrawals are all tax-free. Investments in SSY qualify for a deduction under Section 80C, with a maximum limit of ₹1.5 lakh.
National Savings Certificate (NSC): A Safe Investment Option
Available at post offices, NSC is a fixed income investment scheme where you can start with a minimum deposit of ₹1,000. The scheme currently offers a guaranteed return of 7.7%. Investments in NSC are eligible for a deduction under Section 80C of the Income Tax Act, up to ₹1.5 lakh.
Public Provident Fund (PPF): Long-Term Financial Security
PPF is ideal for long-term investments. You can open a PPF account with a minimum deposit of ₹500, and the maximum annual contribution is ₹1.5 lakh. PPF offers a secure way to build a substantial corpus over time with attractive interest rates and tax benefits.
Insurance: Protect Your Loved Ones and Save on Taxes
Women can avail of tax benefits on life insurance policies taken for themselves, their spouse, or their child. Deductions cannot exceed 10% of the sum insured for a normal person and 15% for a person with specified diseases under Section 80U of the Income Tax Act. Insurance serves as both a protective measure and a smart tax-saving tool.
By exploring these tax-saving options, women can ensure better financial planning and secure their future while maximizing their savings.
