https://jaydeepmitra.com/

Is interest income earned on Mahila Samman Savings Certificate tax free?


The Mahila Samman Savings Certificate, a new small-savings scheme launched for women, was unveiled in the Union Budget in February 2023. (MSSC). On April 1, 2023, the scheme was formally introduced and is now available in 1.59 lakh post offices.

Is interest income in Mahila Samman Certificate taxed or exempt?

The investment under scheme does not qualify for rebate u/s 80C of Income Tax Act. Interest earned under the scheme is taxable. It means that, unlike tax-saving fixed deposits, you cannot receive tax benefits.

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.

Also read: Post Office Schemes latest Interest Rates in India for 2023

How much can you earn on Rs 2 lakh in 2 years
If you invest Rs 2 lakh in the Mahila Samman Savings Certificate for 2 years, it works similarly to a fixed or time deposit in that interest and the invested principal is accrued on a quarterly basis. The final maturity value would be Rs 2.32 lakh as a result.

How to open Mahila Samman Savings Certificate
As of now it is available only at the Post Office. Vist nearest Post Office and submit Account Opening Form, KYC Document (Aadhaar and PAN card) , KYC form for new account holder, Pay-in-Slip along with deposit amount/cheque at nearest post office.

When can MSSC be closed prematurely?
AS per the India Post website, it can be prematurely closed on conditions mentioned below.
(i) On the death of the account holder
(ii) On extreme compassionate ground (i) Life threatening decease of account holder (ii) death of the guardian on production of relevant documents.
Note:-Scheme interest will be paid on principal amount.
(iii) After six months of account opening without mentioning any reason.
Note:-Scheme interest less by 2 per cent will be paid e.g. 5.5%.

Payment on maturity
The deposit matures after two years from the deposit date, and the account holder will receive the eligible balance by submitting an application in Form-2 to the accounts office at that time. Each fraction of a rupee will be rounded up to the closest rupee when determining the maturity value. For this calculation, any amount greater than or equal to fifty paise is treated as one rupee, and any amount less than fifty paise is not considered.

Minimum and maximum investment
Minimum investment amount in MSSC is Rs 1000 and multiples of 100. The maximum limit is Rs 2 lakh per account, or all accounts held by one account holder. Between the opening of another account and the current account, a three-month window must be maintained.

Withdrawal
After a year from the account opening date, 40% of the eligible balance can be withdrawn.



Source link

Spread the word!

Leave a Comment

Your email address will not be published. Required fields are marked *