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Tax Breaks and Benefits for Women-Owned Businesses in India

Tax Breaks and Benefits for Women-Owned Businesses in India

Any business owned by a woman in India is eligible for the Government’s various tax incentives. Numerous sections under the Income Tax Act (ITA) offer lucrative tax benefits of female owned business that can bring down your taxable income favourably. Read the complete details below.

Do women-owned businesses enjoy special tax benefits?

Until FY 2011-12, the basic tax limit/slab, or the applicable tax rates based on income and age, was segregated for men and women taxpayers. Meaning women were paying less tax than men who earned the same income. 

But from FY 2012-13 onwards, standard tax slabs were introduced for both men and women. And because of this, women-run companies currently do not enjoy any specific tax benefits for women owned businesses or exemptions. 

However, notwithstanding the new tax slab, women entrepreneurs can still leverage various women owned business tax benefits and save money when filing their yearly taxes. 

For a woman-owned business, tax benefits under Section 80 of the ITA comprise tax deductions, exemptions, and rebates on expenditure like:

If you are a women-led business in India, here are the women owned business tax benefits you can enjoy as recorded in the ITA’s Section 80:

Section 80C

You can claim tax deductions and tax benefits for women owned business of up to Rs. 1.5 lakhs from your total income under Section 80C, from any of the following:

  • National Savings Certificate
  • Equity Linked Savings Scheme
  • National Pension Scheme
  • 5-year tax-saver fixed deposits
  • Employees Provident Fund

And more tax benefits for women owned business!

Section 80E

For women entrepreneurs, loan taken to finance higher education is also eligible for tax benefits of female owned business. Whether you borrow the funds for your children, spouse, or yourself; you can secure deductions on the interest you pay to service the monthly EMIs on your education loan.

Section 80CCG

If your annual gross income is less than Rs. 12 lakhs, you can secure women owned business tax benefits on your equity investments under the Rajiv Gandhi Equity Saving Scheme (RGESS).

Tax Benefits on Business Loans for Women Entrepreneurs

If you’re presently paying back a debt incurred for business-specific needs, you can write off the interest payable as business expenditure and avail the tax deductions accordingly.

To incentivise female entrepreneurs and promote women empowerment, loans advanced to a woman-led business is considered in the total taxable income. However, women owned business tax benefits are only available on the amount women pay towards the interest component of their EMI payments.

How Certification as a Woman-Owned Business Can Unlock Other Tax Benefits

Certification is an ideal choice for women owned business tax benefits in India. 

One of the most important steps is obtaining MSME Udyam Registration. This registration makes women-owned businesses eligible for many government schemes, and the subsidies and funding that come with them. Let’s look at key benefits:

  • With MSME certification, women-owned businesses get access to helpful government schemes.
  • Women-owned MSMEs with annual turnover exceeding ₹50 crores can get a reduced tax rate of 25% under Section 115BA.
  • There are also direct tax benefits of female-owned business. Eligible MSMEs can claim income tax exemptions under Section 80J, for up to seven years from incorporation.
  • GST tax benefits of female owned business exist for MSMEs with annual turnover of more than ₹1.5 crores.

Other than these tax breaks for women owned businesses, the qualifying MSMEs can benefit from capital gains exemptions, access to collateral-free loans, government tenders, industrial promotion subsidies and concessions.

Additional State-Level Schemes and Indirect Tax Credits for Women Entrepreneurs

Women entrepreneurs can also benefit from several schemes and indirect tax breaks for women owned businesses:

  • The Annapurna Scheme helps women running food-based businesses by offering loans up to ₹50,000 (for equipment, raw materials, delivery needs).
  • The Bharatiya Mahila Bank Business Loan (SBI) supports women-led manufacturing and service enterprises, with funding of up to ₹20 crore.
  • The Pradhan Mantri MUDRA Yojana is used by women starting micro and small businesses. It provides loans under Shishu, Kishor, and Tarun categories based on certain criteria.

Some indirect tax benefits for women owned business are available through:

These tax benefits of female-owned business support financial stability in the long run.

Smart Tax-Saving Strategies for Women-Run Companies

You can get tax breaks for women owned businesses beyond the regular deductions. Follow these practical strategies:

  • Choose the right business structure: LLPs and private limited companies can offer better tax benefits for women owned business than sole proprietorships.
  • Deduct TDS correctly: Always deduct and deposit TDS when paying vendors or contractors. TDS can help you enjoy tax benefits of female owned business.
  • Claim GST Input Tax Credit: If your business is registered under GST, adjust the GST paid on purchases against the GST that is collected on sales. This will lower the tax outflow.
  • Claim operating expenses: Record all expenses like marketing, office rent, travel, and setup costs to reduce taxable income.
  • Use government schemes: Consider schemes like Stand Up India and MUDRA Yojana.

Knowing these women owned business tax benefits can help you support your business operations better.

Conclusion

Even if you’ve missed a deduction claim, you can still avail the same when filing your ITR. In such a case, the Income Tax Department refunds any excess money you paid as tax.Moreover, one of the easiest ways to reduce your taxable income and meet the operational business expenses optimally is by obtaining a business credit facility. At Tata Capital, you can borrow business loans at incredibly competitive entrepreneurs with relaxed business loan eligibility criteria and minimal documentation. So, why wait? Get in touch with us for further details right away!

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FAQs

Are there any special tax breaks for women owned businesses in India?

Tax breaks for women owned businesses can be claimed under Sections 80, 24, and 10(10D). They apply for business expenses, loan interest, insurance premiums, and other property-related investments.

What certifications can help women entrepreneurs get tax or business benefits?

 

Certifications like the MSME Udyam Registration or the DPIIT Startup India recognition help women entrepreneurs access tax benefits of female-owned business, subsidies, support, networking opportunities, and market recognition.

Can business loans for women be used for extra tax deductions?

 

Yes, for business loans, tax breaks for women owned businesses are available on the interest portion under the Income Tax Act, 1961. It’s considered a business expense.

How does Section 80C benefit woman-owned companies specifically?

 

Under Section 80C, tax benefits of female owned business are deductions up to ₹1.5 lakh annually for investments like provident funds, ELSS, insurance premiums, and other investment products.

Are state-level grants or credits available for women-owned businesses in India?

 

Yes, schemes like Annapurna Scheme, Bharatiya Mahila Bank loans, MUDRA Yojana for women, and Stand-Up India offer financial support and tax benefits for women owned business in India.

What are the key steps to maximise tax savings as a female business owner in 2025?

 

To maximise tax benefits of female-owned business, first check your eligibility for various tax exemptions, plan your investments carefully, and choose between old and new tax regimes based on goals.

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