Mahila Samman Savings Certificate: Does this new post office scheme offer tax saving benefits? It is a one-time scheme available for two years, from April 2023-March 2025
Mahila Samman Savings Certificate, a small savings scheme specially for female investors, was introduced during Budget 2023. It is a one-time scheme available for two years, from April 2023-March 2025.
Who can invest in Mahila Samman Savings Certificate
It can be used for investments by a woman for herself or by the guardian on behalf of a minor girl.All About Tax-Saving
Interest rate
This scheme's deposits earn an annual interest rate of 7.5% per annum. This interest rate is not revised for this quarter and is kept unchanged. Interest shall be compounded on quarterly basis and credited to the account. The interest will be compounded quarterly and credited to your account. According to a government announcement released on March 31, 2023, " The interest payable to the account holder in respect of any account opened or deposit made which is not in consonance with the provisions of this Scheme shall be payable at the rate applicable to the Post Office Savings Account."
Does Mahila Samman Savings Certificate have tax saving benefits?
The investment made under the plan is not eligible for a tax saving benefit under Section 80C of the Income-tax Act, 1961. Interest earned under the plan is taxed. This implies that, unlike tax-saving fixed deposits, you will not receive any tax advantages. Mahila Samman Savings Certificate interest income is not exempt from tax. TDS will be deducted depending on the total interest income and individual tax slabs.Payment on maturity
The deposit will mature after two years, and the account holder can receive the Eligible Balance by submitting an application in Form-2 to the accounts office upon maturity.
Premature closure of account
The account shall not be closed before maturity except in the following cases, namely:-
1. On the death of the account holder;
2. Where the post office or the Bank concerned is satisfied, in cases of extreme compassionate grounds such as medical support in life-threatening diseases of the account holder or death of the guardian, that the operation or continuation of the account is causing undue hardship to the account holder, it may, after complete documentation, by order and for reasons to be recorded in writing, allow premature closure of the account.
3. Where an account is prematurely closed under sub-paragraph (1), interest on principal amount shall be payable at the rate applicable to the Scheme for which the account has been held.
4. Premature closure of an account may be permitted, any time after the completion of six months from the date of opening of an Account on an application in Form-4, for any reason other than and in which case the balance as stood from time to time in the account shall be eligible only for the interest rate less by two per cent. than the rate specified in this Scheme.
5. In calculating the maturity value, any amount in fraction of a rupee shall be rounded off to the nearest rupee and for this purpose, any amount of fifty paisa or more shall be treated as one rupee and any amount less than fifty paisa shall be ignored.
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This story originally appeared on: India Times - Author:Faqs of Insurances
