No TDS Deduction in this Post Office Scheme, Know Who Will Get Benefit

Mahila Samman Savings Certificate: To ensure financial security for women in the country, the ‘Women’s Honor Savings Certificate’ (M.S.S.C.) scheme will not have Tax Deducted at Source (TDS) on the interest earned.

Women who participate in this scheme will have to pay income tax on the interest they receive, based on their applicable tax slab. The Central Board of Direct Taxes (CBDT) announced the TDS provisions for the Post Office Savings Scheme on May 16. Any girl or woman in the country can open an MSSC account.

Introduction of the Women’s Savings Scheme

The Mahila Samman Savings Certificate Scheme was launched in the current financial year, as announced by Finance Minister Nirmala Sitharaman during the budget presentation for 2023-24. Under this scheme, women can deposit a minimum of Rs 1,000 and a maximum of Rs 2 lakh in their accounts. The scheme offers an annual interest rate of 7.5 percent, and the deposited amount matures in 2 years.

No TDS on Income below Rs 40,000

Neeraj Agarwal, a partner at Nangia Andersen India, explained that the CBDT notification states that TDS will not be deducted if the interest earned on the Mahila Samman Savings Certificate does not exceed Rs 40,000 in a financial year.

Interest on Rs 2 lakh in the MSSC Scheme over two years

Aggarwal further mentioned, “Under the scheme, a deposit of Rs 2 lakh at an interest rate of 7.5 percent will earn an annual interest of Rs 15,000. Over two years, the total interest will amount to Rs 32,000. Therefore, since the interest remains below Rs 40,000 in any single financial year, TDS will not be deducted.”

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