Last February, three days after former Chief Economic Advisor Arvind Subramaniam had turned heads with the pink cover of the Economic Survey for 2017-18 – chosen to signify the government’s support to the movement for women’s rights – Arun Jaitley’s Budget speech had given women quite a bit to cheer.
For instance, the government has increased the allocation for women- specific programmes by 4% to Rs 1.21 lakh crore, including the Rs 60 crore allocation made towards promoting safe and convenient accommodation for working women. Also, women employees contribution to EPF to 8% for first three years of their employment in order to incentivise employment of more women in the formal sector – a vital initiative because the participation of women in the workforce has dropped from 32% in 2016 to 23% in 2018, as per the India Skills Report 2018 – and to enable higher take home wages.
Can the Modi government do one better for women in the upcoming budget, its last one before the general elections in summer? The news on the personal tax front, although gender-neutral, is optimistic.
Speculation is rife that the government is likely to double the income tax exemption limit from the current Rs 2.5 lakh to Rs 5 lakh. According to last year’s ‘Monster Salary Index’ (MSI), an initiative by Monster India in collaboration with Paycheck.in and IIM-Ahmedabad , Indian women earned a median gross hourly salary of only Rs 184.8, 20% less than men. So if this long-standing wish is granted, plenty of women stand to benefit since on a nine-hour work day basis, the above translates to a salary of less than Rs 5 lakh.
The wishlists of the common man and industry bodies have another thing in common: A demand for an increase in the maximum deduction limit under Section 80C. The logic is that that the hike of Rs 50,000 granted in Budget 2014, which increased the tax exemption limit from Rs 1 lakh to Rs 1.5 lakh, hardly provides any relief in the face of rising cost of living and inflation. Assuming that the Section 80C deduction limit is increased to Rs 2 lakh, those with income up to Rs 5 lakh, who fall in the 5% slab, will reportedly save tax up to Rs 2,500. But those falling in the 20% and 30% tax brackets stand to save around Rs 10,000 and Rs 15,000, respectively.
Going a step further, the industry chambers have recommended tinkering with tax slabs, too. The CII, in its pre-Budget recommendations, suggested lowering the highest personal income tax slab to 25% from 30% at present. On the other hand, FICCI’s wishlist includes a revision in the tax slabs for the individual taxpayers with the top 30% rate applicable only beyond Rs 20 lakh annual income
At a time more and more Indian families are going nuclear with both spouses working full-time, there is no provision under the Income Tax Act to provide deduction in respect of expenditure incurred for day care or creche facilities by such families. “The day care facilities are also expensive. To ensure that the working/salaried couples can easily depend on day care facilities and the expenses are not burdensome to them, deduction of the actual expenditure incurred by the individual or if the expenses are borne fully/partly by the employer, then the same should not be treated as perquisite in the hands of employees,” said Homi Mistry is Partner, Deloitte India.
Also vying for much-needed attention in the upcoming budget is the small but growing tribe of female entrepreneurs. According to a recent survey conducted by Nielsen for Britannia, 48% of Indian non-working housewives aspired to start a business or pursue a hobby to make money when they were young. However, 69% of these women cited that they could not pursue their dreams due to lack of financial funding or home responsibilities and lack of guidance.
Data from the Sixth Economic Census further underscored the fact that the social milieu of India is not very supportive of women entrepreneurs – they comprise under 14% of the total number of entrepreneurs in the country. In this context, there is a growing demand for the government to give a boost to the STEP (Support to Training and Employment Programme for women) Scheme that aims to provide competencies and skills that enable women to become self-employed/entrepreneurs.
In addition, the startup community at large has long been demanding abolition of Angel Tax and increased governmental support for the incubator ecosystem.
(Edited by Sushmita Choudhury Agarwal)