Tax-saving hacks every working woman needs to know

Ananya, a 32-year-old IT professional, exemplifies the spirit of many working women today. She seamlessly balances a rewarding career, a vibrant home life, and personal interests. As the financial year-end approaches, she’s exploring how to save taxes without adding extra stress to her busy schedule.

If you’re a working woman like Ananya, rest assured that tax saving doesn’t have to feel like another chore. Let’s explore some simple, practical tips to help you reduce your taxable income and secure your financial future—no complex planning is required. You can follow these stress-free, tax-saving strategies and enjoy the confidence of making smart, easy decisions for your financial well-being.

Understanding tax slabs for women in India
 

Before jumping into tax saving, first, let’s understand how income tax works in India.

Until the financial year 2011-12, India had separate tax slabs for men and women. However, from the financial year 2012-13 onwards, the government introduced a common tax slab structure for both men and women. Since then, tax rates have been uniform across genders, with variations based solely on age.

The income tax in India follows a progressive structure—meaning the more you earn, the higher the tax you pay. Plus, there are two tax regimes under the –

a) Old regime with various deductions and exemptions

b) New regime with lower tax rates but fewer deductions

Your tax liability depends not just on income and age but also on the tax regime you choose. While this may seem complex, it is straightforward when broken down. Here are the income tax slabs for the Assessment Year (AY) 2025-26 –

Note – Education cess at 4% of the tax and a surcharge will be applicable.

You can choose the tax regime based on your financial goals. If you have made deductions for tax savings, the old regime might be better. Otherwise, the new regime offers lower rates with fewer exemptions.

Top tax-saving tips for working women in India
 

Now, let's explore some options you can consider for tax saving for this financial year –

1. Section 80C investment options
 

Section 80C of the Act allows you to reduce taxable income by investing or spending on specified avenues. The maximum deduction available under this section is ₹1.5 lakhs annually. For tax-free savings, you can consider investing in –

a. Employee Provident Fund (EPF)

This is a retirement benefit scheme for salaried employees, to which both employer and employee contribute. The interest earned is tax-free. It helps build a substantial retirement corpus.

b. Public Provident Fund (PPF)

This is a government-backed long-term savings scheme with a 15-year tenure. It offers an attractive interest rate and tax-free returns, making it ideal for risk-averse investors looking for assured returns.

c. Equity-Linked Savings Scheme (ELSS)

These are mutual funds that invest primarily in equities. They have a lock-in period of 3 years, the shortest among 80C investment options for tax saving, and offer the potential for higher returns, albeit with higher risk.

d. National Savings Certificate (NSC)

This is a fixed-income investment with a tenure of 5 years. The interest is compounded annually but payable at maturity. It's a secure option with moderate returns.

e. Tax-saving fixed deposits (FDs)

Bank FDs with a lock-in period of 5 years. They offer guaranteed returns, and the interest earned is taxable. It works if you are seeking low-risk investment avenues.

For example, to maximise her 80C deductions, Ananya invests ₹50,000 in PPF for assured yet moderate returns, ₹50,000 in ELSS for potentially higher gains, and ₹50,000 in tax-saving FDs for risk-averse security. This diversified approach balances risk and returns while allowing her to avail herself of the full ₹1.5 lakh deduction.

2. Tax savings with health insurance
 

Health is wealth, and it can also help you with tax savings. When you purchase a health insurance policy, you protect yourself and your money against unforeseen medical emergencies. The premium paid is available under Section 80D of the Act.

Moreover, you should consider maternity and critical illness covers, which offer women financial security during crucial life stages. These policies often include coverage for pregnancy, childbirth, and women-specific critical illnesses like breast cancer.

For example, Ananya paid premiums for a policy covering herself and her senior citizen parents. She claimed a total deduction of up to ₹75,000.

3. Tax savings with housing
 

Housing is a necessity for many working women. Both rented and owned housing can help you with tax savings.

If you rent your home and earn a salary, you might be eligible for House Rent Allowance (HRA) exemptions. Your HRA and the rent you pay can lower your taxable income. To claim this exemption, keep rent receipts and a copy of your rental agreement. The exemption is calculated as the minimum of the following –

a) Actual HRA received

b) 50% of salary (basic + DA) for those living in metro cities and 40% for non-metro residents

c) Rent paid minus 10% of salary

For example, if Ananya, residing in Mumbai, earns a basic salary of ₹50,000 per month and receives an HRA of ₹20,000. She pays ₹15,000 as monthly rent. Her HRA exemption would be the least of the –

a) Actual HRA received – ₹20,000

b) 50% of salary: ₹25,000

c) Rent paid minus 10% of salary – ₹15,000 - ₹5,000 = ₹10,000

Thus, Ananya can claim an HRA exemption of ₹10,000 per month for tax savings.

However, with banks offering concessional interest rates and lower stamp duty charges for women, home ownership has become even more attractive for women. You can save tax with –

a) The interest paid on your home loan of up to ₹2 lakhs per year under Section 24(b)

b) The principal repayment under Section 80C

4. Tax savings with retirement planning
 

Retirement planning should start early. The National Pension System (NPS) offers dual benefits—long-term savings and tax exemptions as follows –

a) Employee Contribution (80CCD(1)) – Up to ₹1.5 lakh deduction under Section 80C

b) Employer Contribution (80CCD(2)) – Additional tax savings if your employer contributes

c) Extra ₹50,000 Deduction (80CCD(1B)) – Available for NPS investments beyond the limit of ₹1.5 lakh (Section 80C).

Why Choose IDFC FIRST Bank’s FIRST Power Women’s Savings Account?
 

A savings account is not just a place to park your money—it can also help with tax savings. Under Section 80TTA, interest earned on savings accounts is eligible for a deduction of up to ₹10,000 per year.

The IDFC FIRST Bank FIRST Power Savings Account can make tax savings even more advantageous. You can earn up to 7.25% interest on your savings—tax-free up to ₹10,000—ensuring your money grows steadily.

You can also enjoy –

a) Monthly interest credits: Grow your savings faster by earning interest monthly instead of quarterly.

b) The following coverage at no extra cost –

                                i) Personal accident coverage of ₹35 lakhs

                              ii) Air accident coverage of ₹1 crore

c) Complimentary health benefits: One year complimentary membership of Medibuddy providing health benefits like free full body health checkups for the primary holder, unlimited online doctor consultations, discounts on medicine purchases from select pharmacies, and a wallet balance of ₹500

d) Locker rental discounts: Up to 50% discount on locker rentals for the first year, subject to the availability of a locker

e) Zero fee banking on all services:  Zero-fee banking with no charges on savings account services, including IMPS, NEFT, RTGS, ATM transactions, chequebook issuance, SMS alerts, and cash transactions to make banking hassle-free for you

f) Discounts on online shopping: Curated offers and discounts exclusive with your debit card when you shop on Nykaa, Tira, Zomato, Swiggy, etc., adding value to your banking experience

The FIRST Power Savings Account simplifies tax savings, allowing you to manage your finances efficiently and secure your future.

How to Open a FIRST Power Women’s Savings Account
 

Getting started is simple:

1. Visit the Website: Click here to apply for an online savings account.
2. Apply Online: Fill out the form in minutes with basic details (must be a woman above 18 and an Indian resident).
3. Choose Your Variant: Opt for ₹10,000 or ₹25,000 Average Monthly Balance (AMB) based on your needs.
4. Unlock Benefits: Start enjoying high interest, tax savings, and exclusive perks immediately.

Designed specifically for women, the FIRST Power Women’s Savings Account isn’t just a bank account—it’s a financial empowerment tool. With attractive interest rates, monthly interest credits and attractive lifestyle perks, it’s the perfect companion for your tax-saving journey.

Take action today!
 

Effective tax planning is a crucial part of financial management. By understanding the tax slabs and utilising the available deductions and exemptions, you can significantly reduce your tax liability and maximise your earnings. Remember, starting early and staying informed are key to maximising your tax savings.

Don’t wait—open your FIRST Power Savings Account today and enjoy exclusive benefits that help you save on taxes and grow your wealth effortlessly!