ASSOCHAM recommends increased tax benefits to encourage more women@work

Business chamber, ASSOCHAM, has proposed that the Ministry of Finance offer increased tax exemptions to encourage more women to join the workforce.  

To encourage more women to join the workforce, the industry body, ASSOCHAM, has proposed tax exemptions to the Ministry of Finance, before the union budget.

The industry body first wants a 10-fold increase in exemption of children’s education allowance from the current Rs 100 to Rs 1,000. Similarly, it wants the hostel expenditure allowance, which is presently exempt up to Rs 300 pm per child, for maximum of two children, to be increased to Rs 3,000 pm.

The limit for the allowances for children’s education and hostel expenditure is too low compared to the prevailing school fee and was fixed in FY 1988–99.

According to ASSOCHAM, the increasing cost of health and education is pinching the pockets of the householders, particularly those in the salaried earning bracket. Given this scenario, children’s education allowance must be enhanced by the income tax laws, along with being liberal with expenses on health insurance and medical reimbursements.

Sunil Kanoria, president, ASSOCHAM, says, “While we are confident about a positive multiplier effect due to leaving more money in the hands of the tax payers, a lot of women- specific proposals will be introduced in the Budget, to empower them economically.”

ASSOCHAM believes that this will help the salaried income households and encourage more women to join the workforce.

“To supplement household income, more women are entering the job market. With the increased phenomenon of nuclear families, working women need support in terms of care of young children while they are at work. Hence, to encourage more women to work, it is desirable that a specific provision be introduced to allow exemption for crèche provisions,” the ASSOCHAM memorandum on direct tax recommendations stated.

The chamber has also specifically recommended the exemption for crèche provisions, either within the organisation or through tie-ups via commercial crèche providers. ASSOCHAM has recommended an allowance of up to Rs 2,500 per child every month for up to two children. It has also proposed that exemption on medical expenses reimbursed by the employer should also be increased. Currently the figure is Rs 15,000 per annum, which was also fixed 17 years ago. The industry body now wants this limit to be increased to Rs 50,000 and be made applicable to retired employees as well.