Introducing the Mahila Samman Savings Certificate Scheme

In a significant move to empower women and girls across the nation, the Union Finance Minister, Smt. Nirmala Sitharaman, announced the introduction of the Mahila Samman Savings Certificate (MSSC) during the Budget Speech 2023-24, as part of the Azadi ka Amrit Mahotsav celebrations. This scheme, designed to foster financial inclusion and security, is a government-backed initiative aimed at offering a lucrative savings avenue exclusively for women and girls.

Key Features of Mahila Samman Savings Certificate, 2023

• Eligibility: The scheme is open for investment only in the name of women or girls. Women themselves or guardians of minor girls can initiate accounts under this scheme.

• Deposit Limits: Starting with a minimum deposit of Rs. 1,000 in multiples of Rs. 100, the scheme allows for a maximum investment of Rs. 2 lakh per account, with the option for subsequent accounts after a three-month interval.

• Maturity: The maturity period for the Mahila Samman Savings Certificate account is set at two years, with the maturity amount payable to the account holder upon completion of this term.

• Withdrawal: Partial withdrawal, up to 40% of the account balance, is permitted after one year from the account opening date.

• Tax Benefits: TDS is not deducted from the interest earned under this scheme, making it a tax-efficient savings option. However, TDS may apply as per Section 194A of the Income Tax Act if interest received exceeds specified thresholds.

• Interest Rate: Offering a fixed interest rate of 7.5% per annum, the Mahila Samman Savings Certificate stands out as a high-yield savings instrument compared to traditional bank Fixed Deposits and other small savings schemes.

Premature Closure and Banks Offering MSSC

In certain circumstances, premature closure of the account is permitted, such as after six months without reason, on the account holder's demise, or under extreme compassionate grounds. Several public and private sector banks have been authorized to operate the Mahila Samman Savings Certificate scheme, including Bank of Baroda, Canara Bank, Bank of India, Punjab National Bank, Union Bank of India, and Central Bank of India.

How to Open a Mahila Samman Savings Certificate Account

Interested individuals can initiate a Mahila Samman Savings Certificate account either at post offices or designated banks. The application process involves filling out necessary forms, providing KYC documents, and making the initial deposit. Post office applicants can download the application form from the official website or obtain it directly from the nearest branch. Meanwhile, bank applicants can approach the branch office with the required documentation to complete the process.

Documents Required

To open a Mahila Samman Savings Certificate account, applicants must provide:

• Completed application form

• KYC documents (Aadhaar card, Voter ID, driving license, PAN card)

• KYC form for new account holders

• Pay-in-Slip along with the deposit amount or cheque

Calculation of Returns

Investing Rs. 2,00,000 under the scheme at the fixed interest rate of 7.5% per annum yields Rs. 15,000 interest in the first year and Rs. 16,125 interest in the second year, totaling Rs. 31,125 in interest over two years. Thus, the maturity amount after two years would be Rs. 2,31,125, inclusive of the initial investment and accumulated interest.

The Mahila Samman Savings Certificate, 2023, emerges as a promising avenue for women and girls to secure their financial futures, backed by the assurance of the government and offering competitive returns in a fixed-income environment.

Benefits of Mahila Samman Savings Certificate Scheme

1. Financial Empowerment: The Mahila Samman Savings Certificate scheme is a vital step towards empowering women economically. By providing them with a dedicated savings avenue, it enables women to build their financial security and independence.

2. Secure Investment: Being a government-backed scheme, the Mahila Samman Savings Certificate offers a secure investment option with no credit risk. This assurance makes it an attractive choice for conservative investors seeking stability.

3. Higher Returns: With a fixed interest rate of 7.5% per annum, the scheme offers higher returns compared to many traditional savings instruments. This makes it an appealing option for those looking to maximize their investment gains.

4. Flexible Withdrawal Options: The scheme allows for partial withdrawals, providing flexibility to account holders who may need access to funds before the maturity period ends. This feature enhances liquidity and meets the diverse financial needs of investors.

5. Tax Efficiency: The Mahila Samman Savings Certificate offers tax benefits by exempting TDS on the interest earned, provided it remains below specified thresholds. This tax-efficient feature enhances the overall returns for investors.

6. Easy Accessibility: With the scheme available at post offices and designated banks across the country, it ensures easy accessibility for women from various socio-economic backgrounds. This accessibility promotes financial inclusion and participation.

7. Contribution to Women's Empowerment: By specifically targeting women and girls, the Mahila Samman Savings Certificate scheme contributes to the larger goal of gender equality and women's empowerment. It encourages women to take control of their finances and invest in their future.

Frequently Asked Questions

• What is the Mahila Samman Savings Certificate scheme?

  • The Mahila Samman Savings Certificate scheme is a one-time small savings initiative introduced by the government specifically for women. It offers a maturity period of two years. Any woman or guardian of a girl child can open this account and deposit a maximum amount of Rs. 2 lakh. The scheme provides an attractive interest rate of 7.5% per annum on the deposited amount.

• What is the interest rate of the Mahila Samman Savings Certificate?

  • The interest rate for the Mahila Samman Savings Certificate is fixed at 7.5% per annum. Interest is credited quarterly and paid out at the time of closure of the account.

• Is Mahila Samman Saving Certificate tax-free?

  • No, investments made in the Mahila Samman Savings Certificate do not qualify for tax deduction under Section 80C. However, since the interest earned under this scheme is below Rs. 40,000, no Tax Deducted at Source (TDS) is deducted from the interest amount.

• How to invest in the Mahila Samman Savings Certificate?

  • To invest in the Mahila Samman Savings Certificate, you can open an account with the post office or qualified scheduled banks offering this scheme. Simply download the application form from the India Post website or the respective bank's website, fill it out, and submit it along with the required documents to the nearest Post Office branch or bank branch.

• What is the benefit of the Mahila Samman Saving Certificate?

  • Women investing in the Mahila Samman Savings Certificate receive a fixed interest rate of 7.5% per annum on their one-time deposit for a period of two years. This interest rate is higher compared to many fixed deposit rates offered by banks for the same duration.

• How to obtain Mahila Samman Saving Patra?

  • You can obtain the Mahila Samman Saving Patra from the post office or bank branch where you have opened the Mahila Samman Savings Certificate account.

• Is there any tax benefit on Mahila Samman Saving Certificate?

  • No, there are no tax benefits associated with investments made in the Mahila Samman Savings Certificate. Tax Deducted at Source (TDS) is applicable only if the interest income exceeds the threshold of Rs. 40,000 (Rs. 50,000 for senior citizens). Since the interest income from this scheme falls below the threshold limit, no TDS is deducted.

Conclusion

The Mahila Samman Savings Certificate scheme, introduced by the government, stands as a commendable initiative towards promoting women's financial inclusion and empowerment. With its attractive interest rates, secure investment environment, and tax-efficient benefits, it presents a compelling opportunity for women and girls to safeguard their financial futures. By encouraging savings and investment among women, the scheme not only fosters individual prosperity but also contributes to the overall socio-economic development of the nation.

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