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

Budget 2023 is the Government’s most comprehensive budget before the union elections in May 2024. The budget was highly anticipated by all sectors of society. The Finance Minister has done his best to meet most of the expectations with his limited resources. Budget 2023 announced various measures for different sectors of society. There were 2 special announcements for women and the elderly. Let’s talk about them.

Mahila Samman Bachat Patra

In commemoration of Azadi Ka Amrit Mahotsav the Finance Minister has proposed to introduce Mahila Samman Bachat Patra or Mahila Samman Savings Certificate. It’s a new little saving trick all at once. Outstanding features include:

  1. The plan is available for investment until March 2025.
  2. Will offer house deposit in the name of women or girls.
  3. The tenure will be fixed for 2 years, the maximum deposit amount will be Rs. 2 lakhs, and interest is fixed at 7.5% pa
  4. Partial withdrawals are possible.

There was no indication whether the interest earned would be taxable or not. We will know about the tax, where to open the deposit, and other details when the product is officially released in due course.

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READ MORE: Women in Budget 2023: Government takes measures to empower women economically

How much will investors get?

Deposit of Rs. 2,00,000 will generate Rs. 2,31,125 in 2 years at the rate of 7.5% pa as follows:

At the end of the first year, the interest of Rs. 15,000 is added to the initial capital of Rs. 2,00,000, so that is Rs. 2,15,000.

At the end of the 2nd year, the interest of Rs. 16,125 is added to the capital of Rs. 2,15,000 which is Rs. 2,31,125 on maturity.

While 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 period of 2 years.

Increase in Investment Limit for Senior Citizens Savings Scheme (SCSS)

The Finance Minister also announced the proposal to increase the investment limit for the Senior Citizens’ Savings Scheme (SCSS). The deposit limit of SCSS has been proposed to be doubled from the current limit of Rs. 15 lakhs to Rs. 30 lakhs. A senior couple can invest Rs. 60 lakhs (everyone can invest Rs. 30 lakhs in their respective accounts) in SCSS.

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SCSS is a government-backed deposit scheme that can be opened either at a post office or a designated bank branch. It has a term of 5 years and pays interest quarterly. The interest rate is announced by the Government every quarter. Recently, the government increased the interest rate on SCSS to 8% for the current quarter (January 1 to March 31, 2023). Interest is paid monthly on March 31, June 30, September 30 and December 31.

READ MORE: Women in Budget 2023: FM announces Mahila Samman Saving certificate scheme; offers 7.5% interest.

Increasing investment limits for monthly budgets

The Minister of Finance also announced the proposal to raise the investment limit in the monthly budget. The limit will be increased from the present Rs. 4.5 lakhs to Rs. 9 lakhs for a single account and from Rs. 9 lakhs to Rs. 15 lakhs for joint account.

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Depositors can use a fixed amount and earn monthly interest. The interest rate payable for the current quarter (January 1 to March 31, 2023) is 7.1% pa

More investment options for conservative investors

The 2023 budget increased the SCSS investment limit and the monthly budget. Investors with a conservative risk appetite can invest more in these schemes. Also, since these projects are supported by the Government, there is no risk. If you are a woman, Mahila Samman Savings Paper has additional products for you to use.

Gopal Gidwani is a freelance personal finance content writer with 15+ years of experience. Can be connected to Linkedin


First scenario: Old vs new tax regime

First published: 02 Feb 2023 at 1:40 PM IST


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