Mahila Samman Savings Certificate (MSSC) 2023: A New Savings Scheme for Women

The Government of India has launched a new small savings scheme called Mahila Samman Savings Certificate (MSSC) on 31.03.2023. This scheme is dedicated to women’s empowerment and commemorates Azadi Ka Amrit Mahotsav. The scheme will be available for a period of two years up to March 2025. This article will provide you with an overview of the features of the scheme and how it can be beneficial for women.

GOI Notificcation dated 31/03/2023: Mahila Samman Savings Certificate (MSSC) 2023

MSSC Eligibility and Deposit Amount

Mahila Samman Savings Certificate can only be purchased by a woman or in the name of a minor girl child. The minimum amount of deposit is Rs 1,000, and the maximum amount of deposit under this scheme is Rs 2,00,000. The scheme is a one-time scheme, and accounts can be opened from 01.04.2023 to 31.03.2025 only.

MSSC Interest Rate and Compounding Frequency

The interest rate under Mahila Samman Savings Certificate, 2023 is fixed at 7.5% per annum compounded quarterly. Hence, the annualized yield comes to 7.71%. It is a fixed interest-rated scheme. The interest will be reinvested and will be paid at the time of maturity. No monthly or quarterly or other periodic interest payment is allowed.

MSSC Partial Withdrawal and Premature Closure

Partial withdrawal is allowed after the completion of one year. Up to 40% of the eligible balance can be withdrawn. However, premature closure of the account is allowed only in exceptional circumstances.

No Credit Risk and Tax Benefits (MSSC)

The scheme does not have any credit risk as it is backed by the government. However, there are no tax benefits on making an investment in Mahila Samman Savings Certificate. As per the general rules, the interest income on this scheme shall become taxable.

Benefits and Salient Features of Mahila Samman Savings Certificate (MSSC)

Women in India face many challenges when it comes to financial independence. The Mahila Samman Savings Certificate scheme provides a platform for women to invest in their future and secure their financial stability. The scheme aims to encourage women to save and invest, which can lead to long-term financial independence. Features and benefits of MSSC are as under:

i) The scheme is exclusively for women and girl children;

ii) The deposit facility is available for a tenor of two years;

iii) The minimum amount of deposit is Rs 1,000, and the maximum amount is Rs 2,00,000;

iv) The interest rate is fixed at 7.5% per annum, compounded quarterly, making it an attractive investment option for women;

v) Partial withdrawal of up to 40% of the eligible balance is allowed after the completion of one year;

vi) Premature closure of the account before the maturity period is allowed only in exceptional circumstances;

vii) The scheme does not have any credit risk as it is backed by the government; and

viii) No tax benefit on making an investment in Mahila Samman Savings Certificate is announced. As per general rules, the interest income on this scheme shall become taxable.

TDS Exemption Threhold of Rs 40,000 for MSSC 2023: CBDT Notification 27/2023

CBDT notifies Interest TDS exemption threhold of Rs 40,000 u/s 194A of the Income Tax Act, 1961 in respect of newly launched saving scheme, i.e. Mahila Samman Savings Certificate (MSSC) 2023.

CBDT Income Tax Notification 27/2023 dated 16/05/2023: TDS Exemption Threhold of Rs 40,000 for MSSC 2023

Conclusion

Mahila Samman Savings Certificate, 2023 is a commendable initiative by the government of India to empower women and promote financial independence. The scheme offers a fixed interest rate, partial withdrawal options, and a deposit facility of up to Rs 2 lakh in the name of women or girls for a tenor of 2 years. Women should take advantage of this scheme and secure their financial future.

Salient features from INDIAPOST.GOV.IN Website

(a) Who can open:- (i) By a woman for herself. (ii) By the guardian on behalf of a minor girl. (b) Deposit (i) Minimum of rupees one thousand and in multiple of rupees one hundred. (ii) Maximum limit of rupees two lakh in an account or all account hold by an account holder. (iii) A time gap of three months shall be maintained between the existing account and the opening of other account. (c) Interest (i) Deposit shall eligible for 7.5 per cent interest per annum. (ii) Interest will be compounded quarterly and credited in account and paid at the time of closure of account. (iii) Account opened or deposit made in-contravention of rules will be eligible for interest @ PO Savings Account. (c) Withdrawal 40% withdrawal of eligible balance can be taken after one year from the date of account opening. (d) Pre-mature closure (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%. (e) Maturity (i) After two years from the date opening eligible balance will be paid to the depositor. (f) How to open account (i) Submit Account Opening Form, KYC Document (Aadhaar and PAN card), KYC form for new account holder, Pay-in-Slip alongwith deposit amount/cheque at nearest post office. Forms available