Mahila samman bachat patra, MIP investment limit doubled; What else lies in store?

Budget 2023 was the last full budget of the current government before the Union elections in May 2024. All sections of society had high expectations from the budget. The finance minister has tried his best to meet most expectations with his limited resources. Budget 2023 has announced various measures for different sections of the society. There were 2 significant announcements for women and senior citizens. Let’s discuss them.

Mahila Samman Bachat Patra

To commemorate the Azadi Ka Amrita Mohotsav, the Finance Minister has proposed to launch Mahila Samman Bachat Patra or Mahila Samman Samukhi Certificate. This is a one time new micro savings scheme. Main features include:

  1. The scheme will be available for investment till March 2025.
  2. It will provide a deposit facility in the name of women or girls.
  3. The tenure of the scheme will be fixed for 2 years, the maximum deposit amount will be Rs. 2 lakhs, and interest will be fixed at 7.5%
  4. Partial withdrawals will be allowed.
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There was no declaration as to whether interest earned would be taxable or not. We will know about taxes, where to open deposit and other details once the product is officially launched in due course.

Also Read: Women in Budget 2023: Govt takes steps to empower women economically

How much will the investor earn?

deposit money 2,00,000 will earn Rs.2,31,125 in 2 years at 7.5% as follows:

Interest at the end of 1st year is Rs.50,000. 15,000 will be added to the original principal. 2,00,000 to Rs.2,15,000.

At the end of 2nd year, interest of Rs.1,000. 16,125 will be added to the principal of Rs. 2,15,000 to Rs.2,31,125 on maturity.

Although the return of 7.5% pa is good, it is a one time investment product with a maximum investment limit of Rs. 2 lakhs for a short term of only 2 years.

Increase in investment limit for Senior Citizen Savings Scheme (SCSS).

The Finance Minister also announced a proposal to increase the investment limit for the Senior Citizen Savings Scheme (SCSS). The SCSS deposit limit is proposed to be doubled from the current limit of Rs 15 lakh to Rs. 30 lakhs. A senior citizen couple can invest Rs 60 lakhs in SCSS (each can invest Rs. 30 lakhs in their respective accounts).

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SCSS is a government-sponsored deposit scheme that can be opened at post offices or certain bank branches. It has a tenure of 5 years and pays interest quarterly. The government announces interest rates every quarter. Recently, the government has increased the interest rate of SCSS by 8% for the current quarter (1st January to 31st March 2023). Interest is paid quarterly on 31st March, 30th June, 30th September and 31st December.

Also Read: Women in Budget 2023: FM Announces Mahila Sanman Samukhi Certificate Scheme; 7.5% interest offer

Increase in investment limit for monthly income account schemes

The finance minister also announced a proposal to increase the investment limit for the monthly income account scheme. The limit will be increased from the present Rs. 4.5 lakh to Rs. 9 lakhs for a single account and from current Rs.9 lakhs to Rs. 15 lakhs for a joint account.

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A depositor can invest a lump sum and earn monthly interest. The interest rate payable for the current quarter (1st January to 31st March 2023) is 7.1% per annum

More investment options for conservative investors

Budget 2023 has increased investment limits in SCSS and Monthly Income Account schemes. Investors with a conservative risk profile can invest more money in these schemes. Also, since these are government sponsored schemes, they are risk free If you are a woman, then you have an additional product to invest in which is the Mahila Samman Savings Bank.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. He can be reached LinkedIn


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First Published: 02 Feb 2023, 01:40 PM IST


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