The Union Finance Minister, Smt. Nirmala Sitharaman announced Mahila Samman Saving Certificate, a new small savings scheme for women and girls, while presenting Union Budget, 2023-24. The Mahila Samman Savings Certificate scheme was announced to commemorate the Azadi ka Amrit Mahotsav.
The Mahila Samman Savings Certificate is a one-time scheme available for two years, from April 2023-March 2025. It will offer a maximum deposit facility of up to Rs.2 lakh and minimum of Rs 1000/- in the name of women or girls for two years at a fixed interest rate.
Who is eligible to invest in the Scheme
The Mahila Samman Savings Certificate can be done only in the name of a girl child or woman. A woman or the guardian of a minor girl child can open a Mahila Samman Saving Certificate scheme.
What is the lock in period
The maturity period of the Mahila Samman Savings Certificate account is two years. Thus, the maturity amount will be paid to the account holder after two years from the account opening date.
Partial Withdrawal
However, a partial withdrawal facility is provided under the Mahila Samman Saving Certificate scheme. The account holder can withdraw up to 40% of the account balance after one year from the account opening date.
Premature closure
The Mahila Samman Savings Certificate account can be closed before two years in the following situations:
- After six months of opening the account without giving any reason. In such a case, an interest of 5.5% will be given.
- On the death of the account holder
- In the case of an extreme compassionate ground, such as
- A life-threatening disease of the account holder
- Death of the guardian upon production of relevant documents. In such a case, the interest will be paid on the principal amount
What is the interest rate
The interest rate is 7.5% p.a., credited quarterly and paid at the time of closure of the account.
For example, if someone has invested Rs 2 lakh, she will receive interest of Rs 3,750 after the first quarter. With the compounding interest the maturity amount will be Rs 2,32,044 after 2 years.
How to invest in Mahila Samman Saving Certificate Scheme
Women and guardians of a girl child can open a Mahila Samman Savings Certificate scheme by following the below steps:
- Download the ‘Application for purchasing the certificate’ from the official Indian Post website. You can also visit the nearest Post Office branch and get the form.
- Fill out the Post Office address under the ‘To The Postmaster’ section.
- Fill in your name in the given space and mention the account as ‘Mahila Samman Savings Certificate’.
- Fill out the account type, payment and personal details.
- Fill out the declaration and nomination details.
- Submit the form with the required documents.
- Make the deposit in the Post Office through cash or cheque.
- Receive the certificate that serves as proof of investment in the Mahila Samman Savings Certificate scheme.
The Scheme can also be invested through public sector banks and selected private sector banks also (ICICI Bank, HDFC Bank, Axis Bank and IDBI Bank)
Documents Required for Mahila Samman Savings Certificate Account
- Application form
- KYC documents, such as an Aadhaar card, Voter ID, driving license and PAN card
- KYC form for new account holders
- Pay-in-Slip
A woman or guardian of a girl child can open a second Mahila Samman Savings Certificate account after a minimum gap of three months from the opening of the existing account.
What is the taxability of interest earned
Interest earned on Mahila Samman Savings Certificate scheme is taxable and tax as per applicable slab rate will apply. However if your income including interest of above is below exemption limit, no tax will required to be paid. Even if your taxable income is upto Rs 5 lakhs (old regime) / Rs 7 lakhs (new regime from AY-2024-25), you will get rebate u/s 87A and there will be no tax outgo.
However, the interest will not be subject to TDS being less than threshold prescribed for TDS.
Further you will not get any deduction under Section 80C for the investment made in this Scheme.
Whether to invest in the Scheme
Under the Scheme Women will get a 7.5% interest p.a. quarterly compounding for the one-time deposit made by them at the end of two years. The interest rate of this scheme is higher than many fixed deposit interest rates of banks provided for two years and considering zero credit risk and no TDS one should definitely consider investing in Mahila Samman Savings Certificate scheme
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TW Editorial Team comprises of team of experienced Chartered Accountants and Advocates devoted to spread the knowledge of GST amongst the various stakeholders.