In the first budget of Amrit Kaal, India’s finance minister, Nirmala Sitharaman, made many crucial announcements related to capex, employment, the green push, and income tax. The Finance Minister also had something for the welfare of females, and so announced a one-time new small savings scheme for 18 years and above, the Mahila Samman Savings Certificate (MSSC), for women or girls. The intent behind introducing this saving certificate scheme was to encourage women and girls to save and invest.
Mahila Samman Savings Scheme offers a fixed rate of interest of 7.5% for a tenure of 2 years, from April 2023 to March 2025. Interest on the certificate shall be compounded on a quarterly basis and credited to the account.
Since this is a single account holder type account, the minimum investment amount to start saving through this saving certificate is Rs 1,000, while the maximum investment limit can go up to Rs 2 lakh, either all at once or gradually in multiples of Rs 100.
Partial withdrawals can be initiated by the savers for up to 40% of the eligible balance after completion of one year from the date of opening the account.
Interest earned on an MSSC certificate won’t attract income tax. Finance Ministry has included this scheme under sub-clause (c) of clause (i) of sub-section (3) of section 194A in the Income-tax Act, 1961, in which TDS on interest up to Rs 40,000 is exempt. Taking an example, the saver has thought to making a deposit and starting with the maximum amount, i.e., 2 lakh rupees. If we take a hypothetical scenario in which we don’t consider quarterly compounding, 7.5% on 2 lakh rupees will turn out to be Rs 15,000 in one year and Rs 32,000 in two years. Since the interest is less than Rs. 40,000, no TDS will be applicable.
Women or their guardians interested in investing through MSSC certificates can visit their nearest post office or local bank branch to get the form. The saver has to just fill out the basic details, deposit the amount they wish to start with, and receive a certificate as proof of investment.
The scheme is expected to provide a substantial push for the government’s initiatives for the welfare of girls and women’s empowerment. The Ministry of Women and Child Development runs several other welfare programs for women and girls, which include Beti Bachao, Beti Padhao, One Stop Centers, Nari Adalat, Mahila Police Volunteer, Women’s Helpline, etc.
The move by the government has been appreciated by many as it will enable the women to become independent and participate in India's growth journey.