| My wife, 66, has invested Rs 1 lakh in a Senior Citizen Savings Scheme account with the State Bank of India. She has been told that there would be no tax deduction and hence she won’t be required to fill up Form 15H. As the interest amount exceeds Rs 5,000 a year, is this scheme exempted from the rule? Please clarify the point of tax deduction in this case. |
Arup Ghosh, Chinsura |
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| There is no tax exemption for Senior Citizen Savings Scheme. When the scheme was launched it was not officially stated there would be no tax. However, the government subsequently issued a notification saying that tax has to be deducted at source in case of Senior Citizen Savings Scheme, too. So, your wife will have to give a declaration through Form 15H that she doesn’t fall in any tax bracket. Otherwise, the bank may deduct tax on her interest income. |
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| Making sense of NSS |
| I am 78 and my income is less than Rs 1,85,000. While withdrawing money from my NSS account, I was confused as to which form to submit to claim non-deduction of TDS ? 15H, 16A, 15G or 15F. Do I need to file income tax return for assessment year 2007-08? |
B. Goswami, Calcutta |
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| terest income on NSS is not subject to TDS. So, you don’t have to fill up any form. The amount will mature after four years from the time of investment. Since your total annual income is less than Rs 1,85,000, you don’t have to file income tax returns. |
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| No deduction on maturity |
| Will the accrued interest and principal amount invested in National Savings Certificate in 2004-05 attract tax on maturity? |
Suvam Dutta, Howrah |
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| ly the accrued interest in an NSC investment is taxable on maturity and that, too, if the investor falls in a tax bracket. However, there is no TDS, which means that the post office will not deduct any tax at source. It is the onus of the investor to show this interest income in the total income when the amount matures and pay tax, if any. |
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| If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700001. |
