A notification has been issued by the Central Board of Direct Taxes (CBDT) which specifies that the TDS shall be subject to be applied to the interest made on the Mahila Samman savings scheme. According to the latest notifications, the tax shall get deducted on the interest that has been made via the Mahila Samman Savings Scheme under Section 194A of the Income Tax Act, 1961. The income tax department issues the notification on May 16, 2023.
What is the Method to Calculate TDS?
Under Section 194A the TDS shall get subjected to be applied when the interest made via the scheme in the fiscal year is more than Rs 40,000. The interest could get made via deposits withheld in the bank, post office, or cooperative society. It is similar to the way the Tax Deducted at Source (TDS) would get applied to the interest made on the bank’s FDs. The limit is Rs 50,000, rather than Rs 40,000 for the case of senior citizens.
According to the CBDT notification issued, “In exercise of the powers conferred by sub-clause (c) of clause (i) of sub-section (3) of section 194A of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby notifies that the Scheme namely the Mahila Samman Savings Certificate, 2023, made in exercise of the powers conferred by section 3A of the Government Savings Promotion Act, 1873 (5 of 1873) and notified vide notification number G.S.R. 237(E) dated the 31st March 2023 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), shall be a Scheme framed for the purposes of said sub-clause.”
Important Features of the Mahila Samman Savings Scheme
Finance Minister Nirmala Sitharaman in the Union Budget 2023 has announced the Mahila Samman Savings Scheme. The same scheme would be the women-specific small savings scheme. The government notified the scheme on March 31, 2023, and that came into force on 1st April 2023.
This scheme provides a 7.5% interest rate per annum. The interest would stay fixed all through the investment duration of 2 years. The tax would indeed be levied on the interest made from the scheme. No tax exemption would be there on the interest made through the scheme.
The minimum and maximum investment amounts in the scheme are Rs 1,000 and Rs 2 lakh, respectively. The plan will last for two years.
According to the announcement made in the Union Budget 2023, it is to be cited that the scheme would be available for two years. Between the time period of April 1, 2023, and March 31, 2025, a woman is able to invest in the scheme. Post 1st April 2025, investment in the scheme shall not be permitted until the government extends the date.
