Increasing Female Workforce Participation: The Role of Women in Financial and Tax Planning

As women increasingly carve out their space in the corporate workforce, their involvement in financial decision-making is also evolving. Traditionally dominated by men, the financial landscape is witnessing a significant shift as women engage more actively in investing, evaluating options, and seeking financial advice. Despite this progress, the level of independent control, particularly in areas like tax planning, remains uneven, indicating that the transition is still ongoing.

Growing Participation in Financial Markets

The participation of women in India’s workforce presents a complex picture. While the overall female labor force participation rate has surged from 23.3% in 2017-18 to 41.7% in 2023-24, corporate representation tells a different story. A report from the CFA Institute reveals that women constitute just under 20% of the workforce in listed companies, with their share slightly declining from 19.6% to 19.4% between FY 2022-23 and FY 2024-25. This suggests that although more women are entering the workforce, their presence in formal corporate roles and their advancement within these roles remain limited.

Industry experts note a steady increase in women engaging with formal investment channels, aided by the rise of fintech platforms and greater awareness of financial independence. A recent survey conducted by TOI among 30 women indicated that while many actively invest, they often do so with input from financial advisors or family members. This collaborative approach highlights a nuanced reality: women are increasingly involved in decision-making, but it often occurs in partnership rather than independently.

Investment Preferences and Trends

Despite the rise in participation, women’s investment choices still lean towards safer, more familiar options like fixed deposits and traditional savings products. However, there is a gradual increase in exposure to market-linked investments such as mutual funds and equities. This trend reflects a blend of risk awareness, income patterns, and long-term financial goals rather than a simple aversion to investing. According to Sanaa Zia Khan, Director at Centricity Overseas Financial Distribution Pvt. Ltd., women often prioritize capital protection over long-term wealth creation, with many households still assigning the responsibility for higher-growth investments to male family members.

Survey responses echoed this cautious approach, with many participants indicating diversified portfolios but a preference for stability. For instance, some young professionals reported managing their investments independently across various asset classes, while others still rely on family or advisors for guidance. This indicates a growing comfort with diversified, growth-oriented assets among younger investors, even as some women express hesitation about entering the investment landscape due to fears of potential losses.

Challenges in Tax Planning

While women’s involvement in investing is on the rise, tax planning remains a significant challenge. Many women treat tax planning as a secondary task, often addressing it only as deadlines approach rather than integrating it into a year-round financial strategy. This gap is particularly concerning as the labor market evolves, with a notable increase in gig workers and self-employed women, who now account for nearly 28% of the workforce in the unincorporated non-farm sector.

Chandni Anandan, a tax expert at ClearTax, highlights that transitioning from salaried roles to freelancing complicates income classification and tax compliance. Women moving into independent work must navigate different income tax return forms and tax obligations, which can be daunting. The survey revealed that only a small percentage of respondents actively plan their taxes throughout the year, with many assessing their tax liabilities only during the filing period. This reactive approach can lead to missed opportunities for optimizing returns and building wealth.

Barriers to Financial Control

Despite the increasing participation of women in financial markets, several structural and behavioral factors hinder their progress toward full financial control. Limited exposure to financial decision-making during formative years often leads to reliance on family members or advisors. Household dynamics also play a role, with many women contributing to discussions but still delegating decision-making to others. Time constraints, caregiving responsibilities, and fear of risk further complicate proactive financial management.

Moreover, tax planning is frequently viewed as a compliance task rather than a strategic component of financial planning. Many women admitted to only assessing their tax situation during the filing period, reinforcing a reactive rather than proactive approach. However, there are signs of change, particularly among younger women who are becoming more comfortable with digital platforms and goal-based investing. As financial literacy improves and access to information increases, the shift from participation to independent decision-making appears to be on the horizon.

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