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.
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