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Mahila Samman Savings Certificate: Why you should press the "Skip" button

The Union Finance Minister, Smt. Nirmala Sitharaman announced Mahila Samman Saving Certificate, a new small savings scheme for women and girls, in her Budget Speech 2023-24.

  • Investment window: April 1, 2023 to March 31, 2025

  • Minimum investment: Rs 1,000

  • Maximum investment: Rs 2 lakh

  • Tenure: Two years

  • Interest: 7.5% per annum (compounded quarterly but paid on maturity)

  • Partial withdrawal: Allowed after 1 year, up to 40% of the balance

  • Taxability: The official announcement and post office schemes page remain silent on the taxation structure, so it can be assumed that there is no special tax treatment for this. This means that the interest earned will be added to taxable income every year (on an accrual basis) and will get taxed at the applicable slab.

Nivesh Mitr's Verdict on it

Because there are no tax benefits on this scheme, the post-tax return comes down to 5.5-6% p.a. and the inflation rate in India currently = 6.4% p.a.

And hence, in real monetary terms, you stand to lose when investing in this scheme.

Better Alternative?

Invest in Hybrid MFs & Multi-Asset Funds where if you stay invested for 3-5 years, post-tax returns come to 7-9% p.a.* and hence, beating inflation.

Is now a good time to invest in them?

Hybrid MFs are all-season funds as they invest in all the 3 asset classes simultaneously (equity, debt, gold) and hence, benefit from diversification.

SIP or lumpsum?

Both are equally good options to invest in such funds. Take a call depending on your cash flows.

If we can help you invest, reach us on -

Whatsapp: +91-91110-06340

*Pls note: MF investments are subject to market volatility. Pls, read scheme-related documents before investing.

Sources: Value Reseach, Clear Tax


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