Interest earned from Mahila Samman Certificate scheme will not attract TDS and the interest income will be taxed in the hands of the recipient as per the eligible tax slab, as per a CBDT notification.
The Central Board of Direct Taxes (CBDT) on May 16 notified the Tax Deducted at Source (TDS) provision for the post office savings scheme, news agency PTI reported. Under the scheme, an account can be opened in the name of a girl or woman.
Neeraj Agarwala, partner, Nangia Andersen India, said the CBDT notification clarifies that TDS on interest earned on the Mahila Samman Saving Certificate (MSSC) is not applicable if such interest does not exceed Rs 40,000 in a financial year.
“At 7.5% interest, the MSSC scheme will give a return of Rs 15,000 in one year and Rs 32,000 in two years. It can be said that no TDS will be applicable since the interest accrued in a financial year will be less than Rs 40,000,” Agarwala said.
What is Mahila Samman Savings Certificate, 2023 (MSSC)?
Mahila Samman Saving Certificate scheme was announced in the 2023-24 Budget to commemorate ‘Azadi Ka Amrit Mahotsav’ and is considered a significant step towards financial inclusion and empowerment of the women, including the girls.
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Mahila Samman Savings Certificate Tenure
The two year tenure Mahila Samman Savings Certificate offers a fixed interest compounded quarterly with flexible investment and partial withdrawal options with a maximum ceiling of Rs 2 lakh.
The scheme is valid for a two-year period upto March 31, 2025.
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Mahila Samman Savings Certificate Interest Rate
Mahila Samman Savings Certificate offers a fixed interest of 7.5% interest compounded quarterly with flexible investment and partial withdrawal options with a maximum ceiling of Rs 2 lakh.
