Guide to .. Tax Management ,Tax Planning and Tax Saving
BLOG on Income Tax Management for - AY 2022-23 & 2023-24

3.    A Women, Married or Single, can Save Income Tax - How ?

A woman, whether married or single, can save a great deal of income tax through proper tax planning. However, many women are ignorant about their rights and duties under the Income Tax Act and do not know the legal methods of saving tax by taking advantage of the various provisions for exemptions, deductions, rebates and reliefs under the Income Tax Act. Below are some of the most important aspects of tax planning through which a woman, Married or Single can save a good deal of income tax.

A Woman Can be an Independent Tax Payer

Like a man, a woman can also be an independent tax payer in her own right. Her income need not be added, i.e. clubbed with the income of her husband. A woman does not have to pay any income tax if her net total income does not exceed ` 2,00,000 during the F.Y. year 2012-2013 (assessment year 2013-2014). Thus, a woman taxpayer enjoys the same tax benefit as that of man.

Woman Senior Citizen Enjoys More Benefits

The basic Income-tax exemption for a woman taxpayer who is of the age of 60 years and above is ` 2,50,000 for the financial year 2012-2013. Likewise, a woman tax payer who is a very senior citizen of 80 years and above age would enjoy tax exemption of ` 5,00,000 for the financial year

Avoid Gifts from Three Categories of Relatives

A woman can receive gifts from her relatives and friends. Cash gifts as well as gifts in kind in excess of ` 50,000 from non-relatives in a financial year are taxable as “Income from other Sources”. However, cash gifts as well as gifts in kind can be received from a “relative” without any limit with no income tax liability at all. Relatives of a woman include her husband, her brothers and sisters, brothers and sisters of her husband and of her parents, lineal ascendant or descendant of self and husband along with their spouses. However, a woman should not receive any gift from three relatives, namely: (i) her husband, (ii) her father-in-law, and (iii) her mother-in-law.

This is because under the provisions of Section 64 of the Income Tax Act, the income from any gift received from these three categories of relatives, whether in cash or in kind, could be liable to be included in the income of the donor. Hence a woman should avoid gifts from these relatives. However, an unmarried woman can receive gifts up to ` 50,000 from her future husband as he does not come under Section 64 of the Income Tax Act. Gifts in kind like property, jewellery, shares, etc. received from non-relatives would be taxable as income if in excess of ` 50.000.

Avoid Taking Salary from a Business Concern in which Husband is Interested

A woman should avoid taking salary from a concern in which the husband is substantially interested, say a proprietary concern or a concern in which the husband has more than 20% stake in the profits. However, where a woman holds techniãal or professional qualifications and receives salary in exercise of her duties due to the possession of such qualifications, no addition would be made in the income of the husband in respect of salary received by a woman. It is clearly so laid down in Section 64 of the income Tax Act.

A Woman Can Own a House in Her Own Name

A woman can be the owner of a house or a flat in her name and get it accepted as such in the Income tax department. She can also own it as a co-owner of the house along with her husband or any other relative. A woman would be treated as a separate co-owner in her own right under the provisions of Section 26 of the Income Tax Act provided she Iinances the ownership of the house either by loan or through other sources herself. A woman can also get a loan for acquiring a self-occupied house and get deduction in respect of interest up to ` 1,50,000 every financial year.

A Woman Can Make a Trust for an Unborn Person

A woman can plan to have one trust for an unborn person, such as a would-be son, would-be daughter, would-be son-in-law or a would-be daughter-in-law by keeping the provisions of Section 164 of the Income Tax Act in view, i.e. only one trust should be so formed and none of the beneficiaries should to have any taxable income. In such a trust she can be the sole trustee or appoint more trustees and enjoy the exemption limit of ` 2,00,000 separately for such a trust, for the FY 2012-2013 (AY 2013-2014), which would provide good tax saving for future.

Deduction oh Investments up to Rupees One Lakh

Like a male taxpayer, a woman can also get complete deduction for computing the taxable income up to ` 1 lakh under the provisions of Section 80C of the Income Tax Act in respect of investments like life insurance premium on her life or the life of her husband or the life of a child, contributions to a Public Provident Fund up to ` 70,000 payment for tuition fees for two children, purchase of NSC certificates, having a 5-year bank fixed deposit, etc.

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