Is Mahila Samman Savings Certificate Tax-Free? Find Out

Mahila Samman Savings Certificate is a new savings scheme that was introduced during the Union Budget 2023

<div class="paragraphs"><p>Mahila Samman Savings Certificate</p></div>
Mahila Samman Savings Certificate

The Mahila Samman Savings Certificate is a new savings scheme that was introduced during the Union Budget 2023 and then officially launched on April 1, 2023. It is a new, small-savings scheme aimed to help women reach their financial or savings goals.

Is The Mahila Samman Savings Certificate Tax-Free?

As of now, the Mahila Samman Savings Certificate does not qualify for any tax benefits or exemptions as a form of investment under the Income Tax Act, 1961. Thus, interest earned under this scheme will be taxable as per your applicable tax slabs. The holding bank will automatically initiate TDS on the interest income from Mahila Samman Savings Certificate depending on the amount of interest income and your tax slab.

About Mahila Samman Savings Certificate

As mentioned above, the Indian government has recently introduced a new scheme called Mahila Samman Savings Certificate, which is exclusively for women and girls. This one-time scheme will be available for two years, i.e. from April 2023 to March 2025. The scheme offers a maximum deposit facility of up to ₹2 lakh and is available at a fixed interest rate for two years.

It is a small-savings scheme backed by the government, hence, there is zero to very little associated credit risk. The minimum investment amount for this scheme is ₹1,000.

Only women or guardians of minor girls can apply for a Mahila Samman Savings Certificate account. The account will mature after two years from the date of opening. The maturity amount will be paid to the account holder after two years. The account holder can withdraw up to 40% of their saved funds from the scheme after one year from the account opening date.

This women-centric scheme offers a fixed interest rate of 7.5% per annum, which will be credited quarterly and paid out at the time of account closure. This rate of interest for this scheme is higher than what is offered by most bank fixed deposits and other small savings schemes.

Also Read: What Is Mahila Samman Savings Certificate?