Tax deducted at source will not apply on interest earned on Mahila Samman Savings Certificate, but the interest income will be added to the total income for tax calculation, reported Business Line.
A Finance Ministry notification says the MSSC will be a scheme under “subclause (c) of clause (i) of subsection (3) of section 194A of the Income tax Act, 1961”.
Section 194A deals with provisions relating to TDS on interest other than interest on securities. Tax is to be deducted under section 194A if interest (other than interest on securities) is paid to a resident.
However, this will not be applicable, as prescribed under subclause (c) of clause (i) of subsection (3), on interest amounting to ₹40,000 on any post office deposit under any scheme framed and notified by the Central government. The exemption limit for senior citizens is ₹50,000.