History of Section 88-C :

There was no distinction in Income-tax between a male assessee and a woman assessee till the budget of year 2000 was presented on 29th February, 2000. Section 88-C was introduced by Finance Act, 2000 effective from Assessment Year 2001-2002 (accounting year 1-4-2000 to 31-3-2001). Finance bill 2000 explained provisions relating to Section 88-C as under :

"Tax Rebate of women :

To encourage women to become financially independent. It is proposed to insert a new section namely, section 88C in Income-tax Act. Under the provision, the assessee being a woman, who has not attained the age of sixty-five in the previous year, shall be entitled to a tax rebate of an amount equal to income tax or on account of Rupees five thousand whichever is less. The proposed amount will take effect from 1-4-2001 and will accordingly apply in relation to assessment year 2001-2002."

Section 88C reads as under :

"Rebate of Income-tax in case of women below sixty-five years.

"88C. An assessee -

(a) being a woman resident in India, and
(b) below the age of sixty-five years, at any time during the previous year, shall be entitled to a deduction from the amount of income-tax (as computed before allowing the deductions under this Chapter) on her total income, with which she is chargeable for any assessment year, of an amount equal to hundred per cent of such income-tax or an amount of five thousand rupees, whichever is less."

Above provision was introduced on political grounds. The NDA Government has tried to introduce Bill reserving 33% of Lok Sabha seats for women candidates, but the NDA Government could not get it passed in Lok-Sabha and Rajya Sabha. So, in order to please every woman voter, section 88C was inserted. There was no need to encourage women to become independent, as there are already 50 lacs women who are serving in organized employees labor market, financially independent, and there is no need to give rebate to women assessees. There are number of women who are carrying out their own business or partners in the firm. There are also independent women industrialists and they have established their industry and carry on their business. There was no necessity of creating two classes of assessees except on political ground. The effect of above provision is that exemption limit for women assessees below 65 years is extended from Rs.50,000 to about Rs.80,000. Before ten years, the Finance Minister in his Budget speech used to give approximate income when new taxation provision was introduced. The approximate loss of income was also mentioned in the Budget when particular taxing provision was deleted. The said practice of giving estimated income or estimated loss has been discontinued in the budget speech.

Section 88C should be deleted :

There is no rational for provision of Section 88C as it violates Article 14 of the Constitution of India. Section 88C is required to be deleted. On deletion, Government is likely to get additional revenue receipts of Rs.2500 crores every year. The number of women assessees will also increase as exemption limit for practical purpose will be Rs.60,000 for women assessee below 65 years instead of Rs.80,000 at present.