FINANCIAL EMPOWERMENT - Make the most of the womenonly benefits

B Y D EEPTI B HASKARAN & D EVESH C HANDRA S RIVASTAVA


Monday was International Women's Day, a day that celebrates social, political and economic strides made by women glob- ally. From being a relative of a male member of the house- hold, she now has a presence on the home nameplate.

On the long road to empow- erment, and perhaps to make this journey easier, the govern- ment and financial institutions have offers to make women feel special. As a woman, you are entitled to certain financial benefits and to be aware about them would also be a firm step towards empowerment. We list some of these here.
Income-tax rates Being a woman, the govern- ment 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 exemp- tion 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 de- ductions have been availed.

Compare this with the tax lia- bility 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 them- selves as genuine breadwin- ners 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 invest- ments 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 liabili- ty 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." Insurance 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 in- surance. The difference in pre- mium varies. On an average, for women between 18 years and 30 years, the difference could be in the range of 25-30%. The difference nar- rows as the age increases," says Anand Pejawar, executive director (marketing), SBI Life Insurance Co. Ltd.

If you are working and con- tributing in running the house- hold, you need life insurance and the fact that it comes cheap is a big incentive.

With medical costs galloping ahead of inflation, having suf- ficient 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. Typ- ically, 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 individ- ual policies. For instance, Apollo Munich Health Insur- ance Co. Ltd covers all mater- nity 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 wait- ing period is four years.

"The single biggest reason for hospitalization in India is maternity and yet very few re- tail policies cover maternity expenses," says Antony Jacob, CEO, Apollo Munich Health Insurance.

Banking products Here the freebies are more like gimmicks to increase cus- tomer base. Says Hemant Be- niwal, a Jaipur-based financial planner: "Customization hap- pens 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 of- fer 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.

Real estate There is merit in buying a house in a woman's name. A woman is entitled to pay less stamp duty during the registra- tion of a house, which makes the house that much cheaper.

Stamp duty varies between states.

Says Sachin Vasudev, a Del- hi-based chartered accoun- tant: "Stamp duty may be in single digits, but it can work up a neat number. Women pay lower stamp duty and, there- fore, it benefits to have them as the main applicant or at least a co-applicant. For in- stance, 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, con- sider 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 out- lets are common. Go out and make the most of the benefits of being a woman.

deepti.bh@livemint.com