Bigger tax breaks in the offing for women

The UPA government is set to go all out to woo women in the coming budget with a slew of incentives including gender-oriented spending programmes, special savings schemes and greater tax exemptions. Gaurav Choudhury reports.

The UPA government is set to go all out to woo women in the coming budget with a slew of incentives including gender-oriented spending programmes, special savings schemes and greater tax exemptions covering everyone from students and professionals to widows and destitute women.

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The annual tax exemption for women is likely to be pegged at a level higher than men, sources told HT.

In the last budget, the government had kept the tax exemption limits at Rs. 2 lakh per annum for both men and women.

Sources said finance minister P Chidambaram is likely to signal a return to the earlier practice of keeping the annual tax exemption limits for women higher than the level for men.

Besides, the budget is likely to announce steps to encourage savings by women in financial instruments, such as insurance and pension products, as part of a larger plan to wean them away from locking up surplus funds in physical assets like gold.

Under the initiatives is a plan to make investment by women in insurance, pension and mutual funds, eligible for additional tax breaks, over and above the Rs 1 lakh limit currently allowed under section 80C of the Income Tax Act.

In addition, the finance minister is also expected to announce special lending schemes for destitute women, widows and students in the budget as part of the government’s overall focus on “gender-budgeting” that seeks to achieve a more “gender-equal” distribution of resources.