Women's Day Special: Tax-saving tips for the self-employed and salaried woman

A well-informed woman is careful about her earnings and her expenses. She is not stingy but spends well on certain things that matter and ignores what is not needed or is unnecessary

Amit GuptaUpdated: Monday, March 07, 2022, 08:42 PM IST
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A well-informed woman is careful about her earnings and her expenses. She is not stingy but spends well on certain things that matter and ignores what is not needed or is unnecessary. It is this smart woman who is transforming the notion and the face of investing. Additionally, with spirit and unbridled enthusiasm, women investors are successful entrepreneurs who have an intense taste for creativity and innovations. And at the same time, they leave no stone unturned while making a sustainable ecosystem for further generations of startup entrepreneurs.

Here are some tax-saving tips for the self-employed and also the salaried woman, that she can consider:

Section 80C of the Income Tax Act, 1961

Section 80C of the Income Tax Act, 1961 allows you to claim a tax deduction for investments made up to Rs 1.5 lakh annually. Here are some investment options accessible within this section:

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. 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

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. Section 24 of the Income Tax Act provides a tax removal of up to Rs 2 lakhs each year on the interest component. Budget 2016 presented an extra deduction of Rs 50,000 on the interest component of a home loan ( provided a) it is the individual’s initial residential property purchase, b) the property is worth not more than Rs 50 lakhs, and c) the loan does 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 an individual’s own health insurance premium and the premiums paid for her spouse, parents, and children.

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 per cent. However, this is available for a girl child who is 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 will finish when the girl turns 21 years of age or gets married. You can apply for a premature withdrawal of up to 50 per cent for higher education only once the girl turns 18 years of age.

Smart women investors can opt for either or some of these tax-saving tips mentioned above.

(The writer is Managing Director, SAG Infotech)

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