Make the most of the women-only benefits4 min read . Updated: 08 Mar 2010, 11:02 PM IST
Make the most of the women-only benefits
Monday was International Women’s Day, a day that celebrates social, political and economic strides made by women globally. From being a relative of a male member of the household, she now has a presence on the home nameplate.
Being a woman, the government asks you to pay less tax compared with men.
The exemption limit for a woman is Rs1.9 lakh, which means they have to pay no tax on income up to that amount. On the other hand, the exemption limit for a man is Rs1.6 lakh. So, a woman earning Rs10 lakh per annum would have a tax liability of about Rs1,21,540, assuming all deductions have been availed. Compare this with the tax liability of a man earning the same amount and you will find that he pays Rs3,000 more than the woman.
Anil Rego, CEO and founder, Right Horizons, a financial planning firm, says: “Working women need to look at themselves as genuine breadwinners and should approach planning their finances with the required seriousness and focus. Women have higher tax slabs, which is a big plus, and they can boost their investments with this headstart."
If you are a married couple, you could use the advantage of a higher exemption limit to bring down the total tax liability of you as a couple. Adds Rego: “Couples who are in the same tax bracket can lower their tax liability if the man claims a higher deduction on their joint investments. Even in cases, where the husband has a higher income, this will work. However, for couples in the 30% tax bracket, it doesn’t make much of a difference as to who claims the deduction. In such cases, the tax liability remains more or less the same."
While there are no defined benefits as such, a woman pays much less than a man due to a variety of reasons. “Women are said to have more longevity then men. Also, a large section of women are not into alcohol consumption and smoking, which are detrimental to insurance. The difference in premium varies. On an average, for women between 18 years and 30 years, the difference could be in the range of 25-30%. The difference narrows as the age increases," says Anand Pejawar, executive director (marketing), SBI Life Insurance Co. Ltd.
If you are working and contributing in running the household, you need life insurance and the fact that it comes cheap is a big incentive.
With medical costs galloping ahead of inflation, having sufficient health insurance is a must for everyone, let alone a woman. Here, you can score if you have a group health policy offered by your employer. Typically, group policies cover maternity benefits, which most individual health policies do not cover. You may also get maternity benefits under your spouse’s group health policy.
A few insurers are also trying to offer this benefit in individual policies. For instance, Apollo Munich Health Insurance Co. Ltd covers all maternity expenses and also covers the baby from day one. This benefit comes if you have been with the policy for six years. In case of family floater, the waiting period is four years.
“The single biggest reason for hospitalization in India is maternity and yet very few retail policies cover maternity expenses," says Antony Jacob, CEO, Apollo Munich Health Insurance.
Here the freebies are more like gimmicks to increase customer base. Says Hemant Beniwal, a Jaipur-based financial planner: “Customization happens the most in credit cards, but there are no real benefits to be had. The features do not differ in a big way and the insurance that is offered in these cards are often loaded with fine print."
Among what could really benefit you are loan-related waivers that some banks offer. For instance, if you take a car loan from Axis Bank Ltd, your interest rate would be 25 basis points less than a normal loan. Also, 50% of your processing fee will be waived. HDFC Bank Ltd offers a cash-back of Re1 for every Rs200 spent through its Woman’s Advantage debit card.
Giving a thrust to education among women, some banks offer education loan to women at cheaper rates than men. An education loan for a woman student is cheaper by 0.5-1 percentage point compared with a man in some banks. This benefit is offered by most public sector banks and a few private sector banks, such as IDBI Bank Ltd.
There is merit in buying a house in a woman’s name. A woman is entitled to pay less stamp duty during the registration of a house, which makes the house that much cheaper. Stamp duty varies between states.
Says Sachin Vasudev, a Delhi-based chartered accountant: “Stamp duty may be in single digits, but it can work up a neat number. Women pay lower stamp duty and, therefore, it benefits to have them as the main applicant or at least a co-applicant. For instance, in Delhi, a women need to pay a stamp duty of 4% compared with 6% for men." Sample this: If your apartment costs Rs40 lakh, you would have to shell out Rs1.6 lakh as stamp duty if you are a woman against Rs2.4 lakh if you are a man.
In case it is not possible to buy a property in the name of the woman due to, say, the fact that she is a homemaker, consider a joint registration. In this case, the stamp duty rate is somewhere between the rates applicable to the man and the woman. In Delhi, it is 5%, which works to Rs2 lakh.
Discounts related to women in malls and other retail outlets are common. Go out and make the most of the benefits of being a woman.