Check out the ultimate guide to 16 return-to-work programs in India for women
Budget 2018 seems to be an enabling budget for Indian women. It is, however a mixed bag with tax on long term capital gains and an increase in cess.
Just as a new month begins, we list down our expenses, pay our bills before our spending gets better of us.
Our finance minister, Arun Jaitley does something similar on an annual basis. He prepares the budget for the whole country but can afford to get away with overspending. He can raises taxes to earn more income and fund his spending. We don’t have that luxury.
On February 1, he presented his Budget of earnings and spending for the next financial year (Budget announcements are implemented from April 1 2018 onwards).
The Budget announcements enable us as an earner, saver and a care-taker. There are no major tax announcements which will make us alter our monthly budgets. It only disables our incentive to invest in shares or equity funds, as investments in these instruments will now be subject to a long-term capital gains tax.
Women who join workforce will contribute only 8% (as against 12% of the salary mandate now) towards employee provident fund scheme, for first three years. It’s a provident fund scheme where both employee and employer contribute a certain percentage.
The transport allowance (of Rs 19,200 per year) and a medical expenditure reimbursement (of Rs 15,000 per year) amounting to a total of 34,200 is allowed to salaried people. A new standard deduction amounting to Rs 40,000 replaces the transport allowance and medical expenses.
The existing education cess of 3% on the total income tax liability is increased by 1% and replaced with a new education and health cess of 4%.
Impact: The reduction in EPF contribution is a small measure which alone may not encourage women to join workforce just for this reason. The tax benefit of Rs 5,800 due to change in deductions could be negated by increase in cess.
The interest earned by senior citizens from fixed deposits or post office schemes will now be exempt upto Rs 50,000. Till now interest upto Rs 10,000 was exempt. Such income will be exempt from TDS as well.
The deduction for health insurance premiums paid by senior citizens has been raised from Rs 30,000 to Rs 50,000. The deduction for medical expenditure has also been raised from Rs 60,000 (or Rs 80,000 in-case of very senior citizens) to Rs 1 lakh.
Government had a pension scheme for senior citizens, Pradhan Mantri Vaya Vandana Yojana. The scheme managed only by LIC, had a maximum investment limit of Rs 7.5 lakh and offered guaranteed interest rate of 8.3%. The interest rate is lowered to8% and investment limit is hiked to Rs 15 lakh.
Impact: It gives more income in their hands and allows more deductions for health reasons. Women who are primary care-takers of their parents and are paying premium for them can also claim the deduction.
Also, senior citizens will be more inclined to invest in deposits rather than getting duped into products not suited to their age and risk profile.
Capital gains from selling shares bought more than a year ago, will be taxed as long term capital gains tax. Till this year, these gains were not taxed. Mutual funds will be subject to a dividend tax as well.
Impact: Capital gains above a limit of Rs 1 lakh will be taxed at 10% rate based on a complex formula. Considering the huge gains made in this recent rise in stocks, this wouldn’t really take away your profits from shares. Neither does it make stock investing less lucrative. Even after this 10% tax, it can help you meet long term goal of creating more wealth out of your savings.
The Operation Green Initiative: Government will spend Rs 500 crore to ensure ample production of basic cooking ingredients like tomatoes, potatoes and onions. The operation will make sure that farmers get professional assistance and logistics to ensure smooth production and transportation.
Impact: Women, who always ask four vendors before buying vegetables, will tell you how the prices of these essential commodities have fluctuated in last year. So if the benefits of the new proposed scheme really trickle down to the farmers, we won’t be storing tomato purees in our freezers.
Government has increased the target number for free LPG cylinders to rural women. More loans will be given to women self-help groups and there will be more education opportunities will be provided in villages.
A nationwide comprehensive health insurance scheme with provide health cover of Rs 5 lakh per family
Impact: Our household staff like maids, baby-sitters, drivers and their respective families in their native places will surely benefit from these measures. A happy maid will ensure we can achieve our dreams without the need to overspend!!
Image source: By Simply CVR (Flickr: Ladies) [CC BY-SA 2.0], via Wikimedia Commons
Rachna Monga Koppikar aka The Great Gruhini is a finance writer who’s worked with India’s leading publications for well over a decade. Having swam and mastered the treacherous waters of corporate and personal read more...
Women's Web is an open platform that publishes a diversity of views, individual posts do not necessarily represent the platform's views and opinions at all times.
Stay updated with our Weekly Newsletter or Daily Summary - or both!
As he stood in front of his door, Nishant prayed that his wife would be in a better mood. The baby thing was tearing them apart. When was the last time he had seen his wife smile?
Veena got into the lift. It was a festival day, and the space was crammed with little children dressed in bright yellow clothes, wearing fancy peacock feather crowns, and carrying flutes. Janmashtami gave her the jitters. She kept her face down, refusing to socialize with anyone.
They had moved to this new apartment three months ago. The whole point of shifting had been to get away from the ruthless questioning by ‘well-wishers’.
“You have been married for ten years! Why no child yet?”
I huffed, puffed and panted up the hill, taking many rest breaks along the way. My calf muscles pained, my heart protested, and my breathing became heavy at one stage.
“Let’s turn back,” my husband remarked. We stood at the foot of Shravanbelagola – one of the most revered Jain pilgrimage centres. “We will not climb the hill,” he continued.
My husband and I were vacationing in Karnataka. It was the month of May, and even at the early hour of 8 am in the morning, the sun scorched our backs. After visiting Bangalore and Mysore, we had made a planned stop at this holy site in the Southern part of the state en route to Hosur. Even while planning our vacation, my husband was very excited at the prospect of visiting this place and the 18 m high statue of Lord Gometeshwara, considered one of the world’s tallest free-standing monolithic statues.
What we hadn’t bargained for was there would be 1001 granite steps that needed to be climbed to have a close-up view of this colossal magic three thousand feet above sea level on a hilltop. It would be an understatement to term it as an arduous climb.
Please enter your email address