CBDT notifies TDS u/s 194A applicable to Scheme of Mahila Samman Savings Certificate, 2023 [Read Notification]

The Central Board of Direct Taxes (CBDT) notified that the Scheme of Mahila Samman Savings Certificate, 2023 will be covered under Tax Deduction at Source (TDS) under Section 194A(1)(3)(a) of the Income Tax Act, 1961. The Section 194A covers Interest other than Interest on Securities.

The Central Government within the powers conferred by Section 194A(3)(i)(c) of Income Tax Act notified 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 and notified vide notification number G.S.R. 237(E) dated the 31st March, 2023 will be covered.

As per Section 194A(3)(i)(c), the provisions of subsection (1) shall not apply where the amount of such income or, as the case may be, the aggregate of the amounts of such income credited or paid or likely to be credited or paid during the financial year by the person referred to in sub-section (1) to the account of, or to, the payee, does not exceed forty thousand rupees, on any deposit with post office under any scheme framed by the Central Government and notified by it in this behalf.

A small-savings programme designed exclusively for female investors is the Mahila Samman Savings Certificate which was introduced in the Union Budget 2023. It is a one time savings where women can earn a fixed interest of 7.5%.  The minimum investment starts from Rs. 1000 and maximum of 2 lakhs for a period of 2 years. Also, the investors can do a partial withdrawal of 40%.

The Accounts opened under this scheme will be single-holder accounts that can be opened at the Post Office or any registered bank and it must submit Form-I by March 31, 2025. However, section 194A(3)(i)(c) covers deposits with the post office.

To Read the full text of the Order CLICK HERE

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