Since the Mahila Samman Savings Certificate is basically a fixed deposit, it will come under “income from other taxes”.
Mahila Samman Savings Certificate scheme account can be closed prematurely in case of the death of the account holder.
The Mahila Samman Savings Certificate is a scheme that aids women and girls in planning their financial future. The one-time small savings plan was introduced to commemorate Azadi Ka Amrit Mahotsav. The Mahila Samman Savings Certificate scheme will be valid till March 31 2025. The two-year tenor scheme provides a fixed interest of 7.5 percent. The interest will be compounded quarterly. There are options for flexible investment and partial withdrawal.
Who is eligible for the Mahila Samman Savings Certificate?
The scheme can be opened by any woman. Women can also open the scheme on behalf of a girl. The minimum investment amount is Rs 1,000. The maximum limit is Rs 2 lakh.
After the scheme matures, the investor can request the funds through a Form-2 application. The account holder can withdraw up to 40 percent of the account balance one year after the account’s opening date.
Is the scheme eligible for tax benefit under Section 80C?
Under Section 80C of the Income Tax Act, The Mahila Samman Savings Certificate is not eligible for tax rebate.
Since the Mahila Samman Savings Certificate is basically a fixed deposit, it will come under “income from other taxes”. The amount of tax due will be calculated on the basis of a taxpayer’s gross income, including the interest from term deposits.
As the scheme has a limit of Rs 2 lakh and the interest is 7.5 percent, there is no chance that TDS will be deducted on the Mahila Samman Savings Certificate if this is your only investment. But the tax may depend on your income slab and other factors.
How to invest in Mahila Samman Savings Certificate
• Go to your local post office or bank branch which offers the scheme and obtain the Mahila Samman Bachat Patra Yojana form.
• Fill the application with the required information and submit it after attaching the relevant documentation.
• Select the amount of the deposit.
• Deposit the money through a cheque or cash.
• A certificate will be issued by the bank/ post office as proof of your investment.
The scheme can be closed prematurely in case of the death of the account holder. The Mahila Samman Savings Certificate account can also be closed prematurely on compassionate grounds such as life-threatening disease of the account holder or the death of the guardian. The account can also be closed six months after the opening date before mentioning any reason, but the interest paid will be 2 percent less.
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