No tax relief

• A National Savings Scheme (NSS) account, which was opened in November 1988 in a single name, is set to mature. Which will be taxed - the principle or the interest or both?

S. Mukherjee, via email

• It is understood that the account was opened under NSS Scheme 1987. The scheme, when operational, offered deduction under section 80CCA of the Income Tax Act, 1961. But the section has been amended, offering no deduction after April 1, 1992. The entire maturity amount as and when withdrawn will be taxable.

 

Pension from PSU

•I am getting pension from a public sector bank. During 2014-15, some amount of income tax was deducted at source from my pension amount. While filing the return for 2015-16, what shall I select as the employer category - PSU or others?

H. L. De, Hooghly

• The term "salary" defined under section 17(1) of the Income Tax Act, 1961, includes income from annuity or pension. So, in your case, your employer category for pension income assessable under section 17(1)(ii) is PSU.

 

Account renewal

• What is the rule to restart a frozen term deposit account with a scheduled commercial bank? Is it true that account holders can choose the tenure of the term deposit when renewed?

J. Das, Calcutta

• According to the Reserve Bank of India's guidelines on customer services, banks while obtaining a request letter from the depositor for renewal of an account should advice him/her to indicate the term for which a deposit has to be renewed. In case the depositor does not exercise the option, the bank may renew the account for a term equal to the original term. Before August 2009, the depositor did not have the option to select the tenure upon resumption of a frozen term deposit account.

 

If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abp.in, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.