A woman’s best security is a little money of her own. Demonization proved all theories of women being spenders wrong, by finding lacs in savingof Rs 500 and Rs 1000 notes, saved from reimbursement received for household expenses

We have a very small percentage of salaried women in India. Most women in urban areas do a brilliant job of self-employment ranging from tutoring, handicraft, small trade etc to name a few. In rural areas, we actually are a step ahead with a large percentage of women involved in agriculture and related activities to earn a living. With the government taking extreme measures to encourage money flowing into the banking system, more women will need to start taking full accountability of their money earned and saved. How do women go about securing their future and what are the instruments that you should invest in?

Investments for long-term and start early
Priorities should be owned home and investments with relatively more fixed income like RBI Bonds or Fixed deposits.During early working life, living with parents helps save money which should be invested. Starting a long term SIP in diversified equity mutual funds is a good step to be on the way to wealth creation.Further investment in Equity Linked Saving Scheme can give tax rebateuptoRs 45000/- Read more at Why should you invest in ELSS for 80C and RBI bond before March?

Take risk cover

While buying an insurance policy, women receive a benefit on the premium paid as compared to their male counterparts. Traditionally, women pay less premium than men for the same sum insured when it comes to buying a life insurance policy. Women should take a personal Life Insurance and accident cover in case if they are working or having independent source of Income. Without dependents early in your career you do not need life insurance. Buy medical insurance if you are not covered in your parent’s floater policy.

Separate tax payer and part of family business

A women who are part of family business should start receiving share of profit from family business for effective tax planning. Women have separate tax slab rates in India. In case of small business, women who earns mostly cash they should start saving in banking channels. In case of woman who are Senior Citizen, enjoys more benefits as they have higher basic Income Tax slab. Many women in India save in from of cash or gold. However, with the variety of investment opportunity coupled with tax benefits like ELSS, PPF, etc

Savings bank account benefits

Banks have come up with savings accounts to cater to the financial, investment and lifestyle needs of the modern woman. There is customized savings bank account for women, which offer various rewards and cash back offers. Women in rural areas should start using banking channels for saving and subsequent investments.

Pre-& Post-Pregnancy Dependency

If a woman is working, there are chances she may take a break from her profession during pre-& post-pregnancy or to take care of children. Thus, often a woman's source of income either tends to be volatile or dependent on her husband's income. This dependency can be avoided if a woman understands her needs and plan her finances differently than a man

Savings for Kids Education

To save for their kid's education, working mothers can open a 'Junior Account' with the waiver of monthly account balance requirement if it is linked to a Recurring Deposit (RD) Account or Systematic Investment Plan (SIP) like ELSS

Cheaper interest rate on Housing and Car loans 

Many banks offer lower interest rates on home loans if a woman is applying for it or if she is the first applicant for a joint loan. Usually, the interest rate difference is around 0.15 per cent. The same difference goes for car loans too. 

Stamp Duty Exemption on Property

Some state government provide exemption with respect to Stamp Duty and transfer duty in case of sale deeds, conveyance deeds and gift deeds if the property is in the name of a woman. For Instance, In Delhi, Stamp duty and transfer duty charges when a sale deed is executed in favour of a woman as a buyer is 4% as compared to 6% paid by a man in the same situation. Some municipal corporation even offers a rebate in the property tax if it is in the name of a woman. For instance, Delhi Municipal Corporation (All, i.e., east, south and west) offer a 30 per cent rebate on property tax for the properties in the name of a woman. 

For any query you can write to Chirag@cachauhan.in. Before making any decisions do consult your Professional / tax advisor.  Author does not take any responsibility for misrepresentation or interpretation of act or rules. Neither the author nor the firm accepts any liability neither for the loss or damage of any kind arising out of information in this document nor for any action taken in reliance there on.

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CA Chirag Chauhan

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    I hope by reading this article you got enlighten on ,Financial and Tax planning Gift for Women on their very own day – Happy Women Day!further to mention before taken any financial decision based on this content it is prefered to take an expert opinion as matter can be subjective.