CBDT: TDS Shall not be Levied on Interest Below Rs. 40,000 Earned from Mahila Samman Certificate

CBDT: TDS Shall not be Levied on Interest Below Rs. 40,000 Earned from Mahila Samman Certificate

The Ministry of Finance by its Department of Revenue- Central Board of Direct Taxes (CBDT) has issued a notification, affirming that Tax Deducted at Source (TDS) shall not be levied on interest below Rs. 40,000 earned from Mahila Samman Certificate.

The Union Finance Minister, Smt. Nirmala Sitharaman in her Budget Speech for 2023-2024 had introduced the ‘Mahila Samman Saving Certificate’, a new micro-savings program for women and girls.

For the Azadi ka Amrit Mahotsav, the Mahila Samman Certificate, 2023, has been made available since 1st April 2023 in the Post Offices at an interest rate of 7.5% p.a.

The Notification read:

“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, 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 and notified vide notification number G.S.R. 237(E) dated 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.”

As per Section 194A of the Income Tax Act, 1961, which deals with the provisions relating to TDS on interest other than on securities.

Tax is to be deducted under section 194A where interest (other than interest on securities) is paid to a resident.