India: Taxing Indian Woman ©

Last Updated: 21 January 2002
Article by Ro Nirmala

Co-written by Mr R S Nambi


According to the recent census, the statistics reveals that women occupy nearly 50% of the total population in India. Most of these women have remained as housewives and in modern times due to their educational background and economic necessities, have opted out for service and thus have become additional earning members for the family. According to one of the study on the computation of average per capita income in India, a view has been expressed that one has to impute the value of the economic contribution made by a housewife. In the view of the critic of the above study, the per capita income would improve significantly under Indian situation if the contribution of the housewife had been factored in. Be that as it may, the significant contribution made by Indian women remaining indoors for the economic prosperity of her family cannot be denied. Due to modernity, these women have come forward in the open to prove their mettle and have actually shown remarkable progress over their male counterparts. The fact that the women have waged a lonely battle in this male dominated world has to be acknowledged by the historians. Even though the Government has been promising of proper representation for women and also promises to allocate resources for the development of the economic lot of the women, in the authors’ view, very little has been demonstrated by the Government in action. In this article, the authors traverse through the Indian taxation in an attempt to find out whether the Government has been considerate towards women in taxation of their income, expose the weakness in the present system of taxation and suggest the various issues for the policy makers to be considered in addressing the issues of gender equality.

Taxation of income:

The women living in the state of Goa and in the union territories of Dadra, Nagar Haveli, Daman and Diu are governed by a system of community of property in force in those places and the income of the husband and the wife under any head of income other than the head "salaries" shall not be assessed as that of such community of property, whether treated as association of persons or body of individuals. The above income shall be apportioned equally between the husband and the wife and shall be included separately in the total income of the husband and the wife respectively. The remaining provisions of the Income Tax Act shall apply after the above computation of individual income. In other words, the Portuguese laws have conferred equal rights for women and men in the income earned out of any community of properties.

A woman, who has not crossed 65 years of age and has income by way of "Salaries" or "Business or profession" or from any investments, is eligible for a special tax rebate from the gross income tax payable by her upto Rs.5000/- under the provisions of section 88C. However the woman has to be a resident for claiming this relief.

There is no distinction between the tax treatment of a woman employee and a male employee. A woman may be a director or a senior officer or a junior employee in any proprietorship or partnership or company or any other organization or with central Government or state Government or a local authority. A standard deduction of 1/3rd of the income or Rs.30000/- whichever is lower where the income does not exceed Rs.150000/-, Rs.25000/- where the income does not exceed Rs.300000/-, Rs.20000/- where the income does not exceed Rs.500000/- and NIL where the income exceeds Rs.500000/- is allowed in computing the tax liability under the head "salaries."

The Income tax Act provides that where the woman is employed in a concern owned by her husband, her income is treated as NIL and any income paid to her directly or indirectly by way of salary, commission, fees or any other form of remuneration, whether in cash or in kind would be added to the income of her husband. This is true of any sole proprietary concern or in any concern where the husband has got substantial interest. However if the woman has professional qualifications or has been paid according to the market rates based on her technical qualifications and the remuneration has direct relationship to the technical / professional knowledge and experience, the income earned by her would be taxed in her hands only.

In applying the provisions of the Income tax Act, if the wife earns a higher income than that of the husband without factoring in the implications of Section 64(1)(ii), the income of the husband on the other hand would be added to that of the wife. Similar is the case in respect of clubbing provisions for the income of the minor child under section 64.

If the woman derives any gift from her husband, the income from such gifts is taxed in the hands of the husband under the clubbing provisions. In other words, the Income tax Act does not permit any gifts out of love and affection between the husband and the wife. The situation is true even if the assets are transferred to a third person for the immediate or deferred benefit of the spouse. Similarly the Act discourages any transfer of property to the minor child except where the minor child suffers from permanent physical disability including blindness or is subject to mental retardation, which impairs their earning capacity.

The clubbing provisions recognizes the gift made to the would-be-daughter in law out of love and affection and exempts any income earned by the daughter in law out of such transferred assets. This is an area for tax planning.

The Income tax Act also encourages the co-ownership of the property between the husband and the wife in taxing the income from such properties. However the Act expects such arrangement to be made legally transparent and the document should explicitly make their respective shares definite and ascertainable. This is yet another area of tax planning as the income from properties in such type of arrangements has to be computed individually. To make things simpler, both the husband and the wife can claim relief upto a maximum of Rs.150000/- each in their assessments as interest on housing loan.

Issues for the consideration of the policy makers:

  1. It is generally understood that a woman requires protection and looks for economic security. Before her marriage, the security is provided by the parents, after the marriage, by her husband and in her old age by her own accumulated wealth arising out of gifts from her parents before or at the time of her marriage or after her marriage or gifts from her husband. However the Act discourages such gifts through clubbing provisions. When the country’s population comprises of 50% by women, is it not fair to expect the Government to provide fiscal incentives with the objective of economically liberating women in sharing the family assets? Nowadays the women are excelling in the field of education and are emerging as toppers and the days may not be distant when the
  2. women become the major breadwinners for the family. When such a situation turns into a reality, the women would be forced to pay more tax because of the clubbing provisions. This would be highly unfair to the fair sex.

  3. Section 88C of the Act which provides tax rebate for women not exceeding 65 years of age, restricts the relief only to women who are Resident in India. Any intelligent person may not be able to appreciate the above restriction, as there are more women under the NRI category. Further a woman needs economic protection only when she becomes aged. Therefore the restriction on the grounds of age factor should also be removed. This would enable aged women to claim additional relief under section 88C in addition to the relief provided for senior citizens.
  4. If the Government is seriously committed to the economic uplift of the women, the Government should consider providing tax relief in respect of any business or profession owned or run by a woman entrepreneur through tax holidays. Now the concept of tax holidays is provided only based on location of an industry and is linked to the investment criteria. In order to provide relief to agriculturalists, the agricultural income is considered only for rate purposes. This would be a much better allocation of economic resources based on proportional representation of population mix than the present system of providing allocations based on caste factor. It is proved beyond doubt that the existing system of providing fiscal relief based on caste factor has not benefited the targeted population.
  5. It is also proved by statistics that a woman in India does not enjoy the same state of health as that of her western counterparts. Therefore would it not be prudent to provide extra tax relief for women when more insurance products are made available in the market providing for medi-care of women in the country?


In the opinion of the authors, the women in India have battled their way up from the back yards of a family to the forefront of being a breadwinner and taxpayer today. They have silently contributing to the economic uplift of the family based on their inherent abilities and knowledge in the past. In today’s world, more and more women are becoming educated and scaling up the corporate ladder. The entrepreneurial urge in a woman is also on the increase. Thanks to the freedom of expression, many women are articulating their rights in appropriate forums and reminding the Government and policy makers of their duties and obligations in encouraging the economic lot of the women. It is against this perspective, the article has been written and the authors would encourage readers’ participation of the views expressed in this article. It is also hoped that the NGOs and other women’s welfare organizations would take up the cause further with the policy makers and the authors would feel immensely happy even if they achieve some success.

© Copyrights reserved by RSN & Associates, Chartered Accountants, Chennai, India.

The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions