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No TDS on Interest from Mahila Samman Savings Certificate – Finance Ministry

Scheme Overview – Empowering Financial Instrument for Women

The Mahila Samman Savings Certificate scheme, introduced during FY23, is a savings option exclusively for girls and women. With an attractive annual interest rate of 7.5%, the scheme allows individuals to open an account in their name. The maximum deposit limit is set at Rs. 2 lakh, making it accessible and empowering for women.

Maturity Tenure and Investment Limits

The scheme has a maturity tenure of 2 years, and individuals can invest a minimum amount of Rs. 1,000 and a maximum of Rs. 2 lakh. These flexible investment limits enable women from all walks of life to participate and benefit from the scheme.

TDS Exemption on Interest Income

The recent CBDT notification clarifies that interest earned from the Mahila Samman Savings Certificate will not be subject to Tax Deducted at Source (TDS). As per the notification, if the interest earned does not exceed Rs. 40,000 in a financial year, no TDS will be applicable. This relieves individuals from immediate tax deductions on their interest income.

Taxation in the Hands of the Recipient

With the exemption of TDS, the interest income from the scheme will be taxed in the hands of the recipient. The income will be subject to the individual’s eligible tax slab, ensuring a fair and personalized taxation approach based on overall income and tax liability.

Implications for Investors

The CBDT’s notification brings significant benefits to investors in the Mahila Samman Savings Certificate scheme. The removal of TDS burden allows individuals to enjoy the full interest amount without immediate tax deductions. This positively impacts the overall returns generated by the scheme and encourages more women to participate.

Encouraging Financial Empowerment

The Mahila Samman Savings Certificate scheme, with its attractive interest rate and flexible investment options, aims to promote financial empowerment among women. By providing a tax-efficient savings avenue, the scheme encourages women to save and grow their wealth while supporting their financial independence.

Mahila Samman Savings Certificate – FAQs

Q1: What is the Mahila Samman Savings Certificate scheme?

Ans: The Mahila Samman Savings Certificate plan is a savings option intended specifically for women and girls. It has a 7.5% annual interest rate and allows users to open an account in their name. The program attempts to increase women’s financial empowerment.

Q2: What is the recent notification from the CBDT regarding the Mahila Samman Savings Certificate?

Ans: According to the CBDT statement, interest received on the Mahila Samman Savings Certificate would not be subject to Tax Deducted at Source (TDS). There would be no TDS if the interest earned does not exceed Rs. 40,000 in a fiscal year.

Q3: What are the implications of the CBDT’s notification for investors?

Ans: The CBDT’s notice provides major benefits to Mahila Samman Savings Certificate scheme investors. Individuals can now enjoy the full interest amount without immediate tax deductions because TDS has been removed. This has a favorable impact on the scheme’s overall results and encourages more women to enroll.

Author

  • Priti Palit, an accomplished edtech writer, boasts a wealth of experience in preparing candidates for multiple government exams. With a passion for education and a keen eye for detail, she has contributed significantly to the field of online learning. Priti's expertise and dedication continue to empower aspiring individuals in their pursuit of success in government examinations.

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