Now, apply for Mahila Samman Savings Certificate in banks

Now, one can apply for a Mahila Samman Savings Certificate, 2023, in the 12 public sector banks and four private sector banks. The scheme was announced in the Union Budget this year.

Finance Minister Nirmala Sitharaman had announced: “To commemorate Azadi Ka Amrit Mahotsav, a one-time small savings scheme, Mahila Samman Savings Certificate, will be made available for a two-year period up to March 2025. This will offer deposit facility up to Rs 2 lakh in the name of women or girls for a tenor of 2 years at a fixed interest rate of 7.5 per cent, with partial withdrawal option.”

Initially, the scheme was made available through post offices. Now a notification says, all public sector banks and ICICI Bank, Axis Bank, HDFC Bank Ltd and IDBI Bank “shall be authorised to operate the Mahila Samman Savings Certificate, 2023,” effective from June 27.

Among the conditions prescribed for authorization, are dedicated software in the bank for operation and accounting of National Savings Schemes, with specific functionality for each scheme. The bank may manage the operations in the online mode also in all branches that are on the Core Banking Solution, subject to adequate security checks. All remittances shall be credited to the Government Account at the RBI , Central Accounts Section, Nagpur, within one day in the case of Core Banking Solution branches, and three days in the case of non-Core Banking Solution branches.

Also read: Mahila Samman Savings Certificate: Should you invest?

“In case of a delay in remittances beyond the period, as mentioned, the bank shall pay a penalty equal to the rate of interest payable to the depositor plus 0.5 per cent in case of delays up to 30 days, and 1 per cent in case of delays beyond 30 days,” the notification said, while adding that the bank shall report various transactions under proper codes to the Reserve Bank of India, and the Ministry of Finance may levy penalty in case of the bank’s failure on this count.

The bank will be required to declare in advance the list of branches that shall not operate any of the National Savings Schemes. Every bank will be required to submit a periodic report or any other requisite information from time to time to the Central Government concerning the deposits of subscription and withdrawals under the said Scheme.

The government has already clarified that tax deducted at source will not apply on interest earned on Mahila Samman Savings Certificate, but the interest income will be added to the total income for tax calculation.

A Finance Ministry notification says the MSSC will be a scheme under “sub-clause (c) of clause (i) of sub-section (3) of section 194A of the Income-tax Act, 1961”. Section 194A deals with provisions relating to TDS on interest other than interest on securities. Tax is to be deducted under Section 194A if interest (other than interest on securities) is paid to a resident.

However, this will not be applicable, as prescribed on interest amounting to Rs 40,000 on any post-office deposit under any scheme framed and notified by the Centre. The exemption limit for senior citizens is Rs 50,000.

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