On April 26, 2023, women and child development minister Smriti Irani opened a Mahila Samman Savings Certificate (MSSC) account. The minister visiting the Sansad Marg Head Post Office to open an account under the women-centric scheme, a move likely to encourage women in India to follow suit. Find out everything you need to know about the small savings scheme of the central government if you are considering investing in it.
(Image source: PIB)
Mahila Samman Savings Certificate: Main facts
Launch date: Budget 2023-24
Launched by: Finance minister Nirmala Sitharaman
Interest: 7.5%
Maturity period: March 31, 2022
Maximum deposit amount: Rs 2 lakh
Minimum deposit amount: Rs 10,000
Who can apply: Women and girls
Partial withdrawal: Allowed
Partial withdrawal limit: Up to 40% of balance after one year
Tax benefit under Section 80C: No
Taxation under the head: Income from other sources
(Snapshot of PM Modi’s Twitter feed)
The Mahila Samman Savings Certificate 2023 has been made available in 1.59 lakh post offices since April 1, 2023. Aimed at enabling financial inclusion and empowerment of the women, the scheme was announced in the 2023-24 Budget by finance minister Nirmala Sitharaman.
Eligibility
An account under this scheme can be opened by a woman. For minor girls, their guardian can apply on their behalf.
Interest rate
The 2-year tenure scheme offers a fixed interest of 7.5% interest compounded quarterly.
Validity
The scheme is valid for a two-year period from April 2023 to March 2025. It will expire on March 31, 2025. After this period, you cannot invest in this scheme.
Minimum amount
An account can be opened with a minimum amount of Rs 1,000 and any sum in multiples of Rs 100. No subsequent deposit is allowed in that account.
Number of accounts
An individual may open any number of accounts, but they can only deposit a cumulative Rs 2 lakh in all their accounts. You can open your second account after a gap of 3 months after opening the first one. Subsequently, the same gap must be maintained between new account openings.
Partial withdrawal
Partial withdrawal of up to 40% of the account balance is allowed after the expiry of one year from the date of opening of the account.
Maturity
The account will mature after 2 years from the date of opening.
Premature closure
Premature closure of the account is allowed at any time after the completion of 6 months from the date of opening of the account for any reason. In such cases, 2% less interest at 5.5% will be paid than the specified rate of 7.
Nomination
Nomination facility is also available for the account.
TDS
Income earned through the Mahila Samman Savings Certificates will not attract TDS (tax deducted at source), the Central Board of Direct Taxes (CBDT) has notified. This interest income, however, will be added in the overall income of the taxpayer. They will then have to pay tax on the amount based on their tax slab, according to the CBDT notification dated May 16, 2023.
Tax benefits
While small savings schemes qualify for tax deductions under Section 80C of the income tax act, contribution to the MSSC is not eligible for this deduction, according to a circular issued by the finance ministry. The interest earned from the scheme will be treated the same as income from fixed deposit and taxed under the head ‘Income from Other Sources’.
How to open Mahila Samman Savings Certificate (MSSC) account?
Step 1: Visit the nearest post-office branch.
Step 2: Ask for the account opening form (Form I).
Step 3: Fill the form and provide relevant KYC documents like Aadhaar card, PAN, address proof, etc.
Alternatively, you can find and download this form online on the India Post offcial portal under ‘Application for purchasing the certificate’. Take a printout, fill it and then go to the post office.
Step 4: Submit Form-I on or before March 31, 2025.
Step 5: Deposit the money by cash or cheque.
Step 6: The post office will issue you a certificate after all is done.
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News update
PSBs, eligible private banks can issue Mahila Samman Savings Certificate
FAQs
Is the Mahila Samman Savings Certificate scheme eligible for tax benefit under Section 80C?
No, the Mahila Samman Savings Certificate scheme is not eligible for tax benefit under Section 80C.
My minor daughter and I both applying for the scheme? What will be the investment limit?
Each individual can deposit up to Rs 2 lakh under the scheme separately.
Can we apply for the Mahila Samman Saving Certificate scheme jointly?
No, the Mahila Samman Saving Certificate scheme can only be purchased in the name of a single holder.
Can NRIs invest in the Mahila Samman Saving Certificate scheme?
No, NRIs are not eligible to invest in the Mahila Samman Saving Certificate scheme.
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