No section 194A TDS on interest from Mahila Samman Savings Certificate – Notification No. 27/2023-Income Tax | Dated: 16th May, 2023
Introduction: The Mahila Samman Savings Certificate is a financial instrument that aims to empower and provide financial security to women in India. This government-backed scheme not only encourages women to save but also offers attractive interest rates. One significant advantage of investing in Mahila Samman Savings Certificates is that the interest earned on them is exempted from tax deduction at source (TDS) under Section 194A of the Income Tax Act.
Understanding Section 194A and TDS: Section 194A of the Income Tax Act pertains to the deduction of TDS on interest income. According to this section, individuals and entities responsible for making payment of interest are required to deduct tax at the prescribed rates before making the payment. However, the government has provided certain exemptions to promote specific savings schemes, including the Mahila Samman Savings Certificate.
Exemption for Mahila Samman Savings Certificate: The Mahila Samman Savings Certificate is specifically designed to benefit women and encourage their financial independence. To provide further incentive, the government has exempted the interest earned from these certificates from TDS under Section 194A. This means that the interest received by women from Mahila Samman Savings Certificates is fully payable to them without any deduction of tax at source.
Importance of the Exemption: The exemption from TDS on interest from Mahila Samman Savings Certificates holds significant importance for women investors. It enables them to receive the full interest amount earned on their investments, allowing them to maximize their savings and meet their financial goals. This exemption recognizes the importance of promoting women’s financial inclusion and empowering them through savings and investments.
Conclusion: The exemption from TDS on interest from Mahila Samman Savings Certificates is a progressive step taken by the government to promote women’s financial independence and encourage savings among women. By allowing women to receive the full interest amount without any deduction of tax at source, the government aims to boost women’s savings and provide them with a secure financial future. It is essential for women investors to be aware of this exemption and fulfill the necessary requirements to claim the exemption effectively.
MINISTRY OF FINANCE
(Department of Revenue)
(CENTRAL BOARD OF DIRECT TAXES)
Notification No. 27/2023-Income Tax | Dated: 16th May, 2023
S.O. 2189(E).—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.
2. This notification shall come into force from the date of its publication in the Official Gazette.
[Notification No. 27/2023/F. No. 370142/11/2023-TPL]
MRINALINI KAUR SAPRA, Director
