“If you want to lift up humanity, empower women. It is the most comprehensive, pervasive, high-leverage investment you can make in human beings.” ― Melinda Gates
There is enough written about the gender inequalities especially in finance that create several disadvantages to women and often discourage our participation in the financial ecosystem.
This year, we wait to see whether some of our asks are fulfilled.
With the promise of a “Never Before” Budget, we hope there will be assistance provided to women to further increase participation in the financial ecosystem. Benefits that only might just bring us at parity with men. That women earn Rs 75 for every Rs 100 earned by a man for the same job is a well-known fact.
Add to this the career breaks that we take are attributed to child bearing, taking care of the elderly, unpaid work, and more. Both the wage gap and career pauses could be huge setbacks financially, some part that can be taken care of by tax benefits.
Until FY 2011 - 2012, women and men had different income slabs that provided a slight relief for women.
Is a differential tax system the solution?
It is important to make the playing field a fair one. Here are some areas that women want to see change in: wage parity, ownership of physical assets, access to easy credit for vocational training, and so on.
We have moved beyond the fundamental levels of solving a problem and a differential tax-system may no longer be the answer considering not only could that be patronising, but also introduce issues such as women being given low pay packages considering low taxation.
What could benefit us, however, could be differential taxation on capital gains. Women, per historic data, are long term investors.
Meaning that we prefer to stay put in an investment, a habit inculcated by the traditional investment options such as fixed deposits, post-office saving accounts, and the like.
Returns aren’t the same as the value of the investment!
Unfortunately, taxes applicable on these investments often leave very little value to no value created on that investment. So in essence, when a woman saves her money, she isn’t able to beat inflation, thus getting just a little poorer than before.
Lower tax rates, especially on short-term capital gains on debt products, could lead to more participation in investments where women prefer security overgrowth.
Lower taxes on capital gains will also nudge investments into the capital markets which see an abysmal ~15-18% participation by women investors.
Homes and retirement schemes
Home loans should be cheaper. This will help increase ownership and also enable women to be independent, as we talk about self-reliance, or being aatma-nirbhar. Stamp duty on immovable investments should also be reduced.
In the financial assets space, more gender-specific investment schemes - like the Sukanya Samruddhi Yojana - should be made available for women with a focus on building retirement funds.
We live longer and have higher healthcare costs
Women outlive men and bear higher medical care costs. Exemptions could be increased on the purchase of health insurance products for us and the elderly whose insurance protections we pay for.
There is access to credit for women for vocational training, however, this access is restricted and offered mostly by NBFCs who charge higher rates for non-conventional courses.
The banking system could extend lending to women at competitive rates to increase access to education. This could enhance women’s income-earning potential, and possibilities to save and invest more.
Does our country’s taxation system leave women worse off or better off is the simplest question to ask while thinking of implementing benefits?
Basis, a platform that powers financial independence for women through its award-winning app, features bite-sized financial education, supportive communities, and curated financial services and advisory.
(Dipika Jaikishan is Co-founder and COO, Basis)Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.