Section 10(15)

Tax-free certificates/fixed deposits/capital investment bonds/foreign loans, etc.

n Notified bonds, certificates, etc., notified for purposes of section 10(15)(i)1 :

Sl. No.

Name of securities, bonds, annuity certificates, etc.

Maximum amount

(1)

(2)

(3)

1.

12-year National Savings Annuity Certificates

Whole of the amount

2.

National Defence Gold Bonds, 1980

Whole of the amount

3.

Special Bearer Bonds, 1991

Whole of the amount

4.

Treasury Savings Deposit Certificates (10 years)

Whole of the amount

5.

Post Office Cash Certificates (5 years)

Whole of the amount

6.

National Plan Certificates (10 years)

Whole of the amount

7.

National Plan Savings Certificates (12 years)

Whole of the amount

8.

Post Office National Savings Certificates (12 years/7 years)

Whole of the amount

9.

Post Office Savings Bank Accounts

Whole of the amount

10.

Public Account of the nature referred to in item (6) in the Table below rule 4 of the Post Office Savings Account Rules, 1981

Rs. 5,000

11.

Post Office Cumulative Time Deposits Rules, 1981

Whole of the amount

12.

Scheme of Fixed Deposits  governed  by the Government Savings Certificates (Fixed Deposits) Rules, 1968

Whole of the amount

13.

Scheme of Fixed Deposits governed by the Post Office (Fixed Deposits) Rules, 1968

Whole of the amount

14.

Special Deposit Scheme, 1981

Whole of the amount

Notification : No. SO 607(E), dated 9-6-1989.

n The Central Government specifies interest on the deposits in the Non-Resident (Non-repatriable) Rupee Deposit Scheme accruing to non-residents only, for the purposes of section 10(15)(i) for the assessment year 1993-94 and subsequent assessment years —Notification : No. SO 653(E), dated 31-8-1992.

n The Central Government specifies the Resurgent India Bonds, being bank instruments representing foreign currency denominated deposits in the form of promissory notes, issued by the State Bank of India, a bank constituted under section 3 of the State Bank of India Act, 1955 (23 of 1955), as deposits for the purposes of section 10(15)(i) - Notification No. SO 844(E), dated 21-9-1998.

n Notified certificates for purposes of section 10(15)(ii)1 :

 

Certificates

Notification

 

 

No.

Date

1.

10-Year Defence Deposit Certificates

SO 3574

23-11-1962

2.

12-Year National Defence Certificates

SO 3574

23-11-1962

3.

The Government of India Defence Certificates

SO 588

27-2-1963

4.

Premium Prize Bonds, 1963

SO 2953

9-10-1963

5.

7-Year National Savings Certificates (II Issue) and 7-Year National Savings Certificates (II Issue)—Bank Series

SO 2880

1-9-1970

6.

7-Year National Savings Certificates (III Issue) and 7-Year National Savings Certificates (III Issue)—Bank Series

SO 2880

1-9-1970

n Notified fixed deposit for purposes of section 10(15)(iia)1 :

     (a)   Any scheme of fixed deposits governed by the Government Savings Certificates (Fixed Deposits) Rules, 1968, and any scheme of fixed deposits governed by the Post Office (Fixed Deposits) Rules, 1968—Notification : No. SO 2063, dated 4-6-1968 as corrected by SO 2877, dated 1-9-1970.

     (b)   Special Deposit Scheme, 1981—Notification : No. SO 1518, dated 22-2-1982.

n Bonds notified for purposes of section 10(15)(iib) : 7 per cent Capital Investment Bonds—Notification : No. SO 413(E), dated 11-6-1982.

n Notified bonds under section 10(15)(iic) - 8% Relief Bonds, 2002 [with effect from 1-3-2002 - See Notification No. F. 4(4) - W&M/2002, dated 28-2-2002] (See below)

n The Government of India hereby notifies that the Scheme of 8.5% Relief Bonds, 2001 as specified in this Ministry’s Notification No. F. 4(1)-W&M/1999, dated 3rd May, 1999 read with No. F. 4(4)-W&FM/2001, dated 15th March, 2001 shall be subject to further amendment as follows :—

       I.   The Bonds will bear interest at the rate of 8% per annum with effect from the 1st March, 2002 instead of 8.5% per annum. The bonds will also carry post-maturity interest at the rate of 8% per annum.

      II.   Limit of investment.

             The maximum limit for investment in the Bonds shall be Rs. 2,00,000 per annum.

     III.   Consequent to the above, the Scheme shall be known as ‘8% Relief Bonds, 2002’ with effect from the 1st March, 2002.

2. It is further notified that the sale of 8.5% Relief Bonds, 2001 shall cease from the 28th February, 2002. However, valid applications received by the Receiving Offices upto the date of receipt by them of the Government’s decision regarding this reduction in the rate of interest shall be deemed to be subscription under the scheme of 8.5% Relief Bonds, 2001 - Notification F. No.4(5) W&M/2002, dated 28-2-2002.

n The Government of India hereby notifies that post-maturity interest on Relief Bonds issued under the Schemes of 9% Relief Bonds, 1987, 10% Relief Bonds, 1993, 9% Relief Bonds, 1993, 10% Relief Bonds, 1995, 9% Relief Bonds, 1999 and 8.5% Relief Bonds, 2001 vide Notifications :

      (i)   No. F. 4(31) - W&M/87, dated 17th November, 1987 read with No. F. 4(9) - W&M/92, dated 6th November, 1992.

    (ii)   No. F. 4(2) - W&M/93, dated 10th March, 1993.

   (iii)   No. F. 4(31) - W&M/87, dated 17th November, 1987 read with No. F. 4(21) - W&M/93, dated 2nd September, 1993, and No. F. 4(21) - W&M/93, dated 16th September, 1993.

    (iv)   No. F. 4(2) - W&M/93, dated 10th March, 1993 read with No. F. 4(14) - W&M/95, dated 29th September, 1995.

     (v)   No. F. 4(14) - W&M/95, dated 29th September, 1995 read with No. F. 4(1) - W&M/99, dated 1st January, 1999 and

    (vi)   No. F. 4(4) - W&M/2001, dated 15th March, 2001.

which have matured but not encashed or are maturing hereafter shall be payable at 8% per annum with effect from 1st March, 2002 instead of the rate of post-maturity interest applicable thereunder - Notification F. No. 4(5) - W&M/2002 (1), dated 28-2-2002.

n It has been reported in some sections of the Press that the “the interest rate will be lowered even on past schemes of Relief Bonds”. This can be misleading.

It is clarified that interest rates under all relief bonds schemes will continue to be at the contracted rate upto the date of maturity. Thus for example the bonds issued under 9 per cent relief bonds, 1999 and 8.5 per cent relief bonds, 2001 schemes will carry interest at the contracted rate of 9 per cent and 8.5 per cent respectively till their date of maturity.

As a facility to the investor, however, interest on relief bonds is paid even after the bonds mature till they are encashed. Interest in such cases is paid at the contracted rate till the bonds mature and at the applicable revised rates for the period between the date of maturity and the date of encashment - RBI’s Press release 2001-2002/985, dated 4-3-2002.

n NRI Bonds notified for purposes of section 10(15)(iid) :

     (a)   ‘NRI Bonds - 1988’ issued by the State Bank of India—Notification : No. SO 847(E), dated 24-10-1989.

     (b)   ‘NRI Bonds (Second Series)’, issued by the State Bank of India—Notification : No. SO 551(E), dated 27-7-1992.

n Financial institutions notified for purposes of section 10(15)(iv)(b) :

 

Institution

Notification

 

 

No.

Date

1.

International Finance Corporation, Washington

SRO 452

 31-1-1958*

2.

Export Import Bank of Washington, Washington D.C.

SRO 453

 31-1-1958*

3.

Export Import Bank of Japan, Tokyo

SRO 1896

1-9-1958*

4.

The Development Loan Fund, Columbia, U.S.A.

SRO 1905

30-7-1960*

5.

The Kreditanstalt fur Wiederaufbau (West German Bank for Reconstruction), West Germany

SO 2610

24-7-1962

6.

The Banque Francaise du Commerce Exterieur, Paris

SO 3673

5-10-1964

*Note : Under section 297(2)(k) of the 1961 Act, the notification issued under section 4(3)(xviib)(ii) of the 1922 Act are deemed to have been issued under section 10(15)(iv)(b) of the 1961 Act and continue in force accordingly.

n The Government has decided to resume the consideration of applications for exemption from payment of income-tax under section 10(15)(iv), items (b) to (g), on interest payable on all external commercial borrowings approved on or after April 1, 1995—PIB Press Release, dated 7-8-1995.

n For purposes of section 10(15)(iv)(c) a single consolidated order of exemption will be issued covering the entire amount of the loan or debt under the agreement, irrespective of whether the entire goods have been supplied or part of them are likely to follow in due course—Letter : [F.No. 21/221-64-IT(A-I)], dated 24-8-1964.

n Notified schemes for purposes of section 10(15)(iv)(i) :

-    Deposit scheme for retired Government Employees—Notification: No. GSR 598(E), dated 7-6-1989 as amended by Notification No. F.No. 15/1/93-NS-II, dated 15-3-1993, No. GSR 745(E), dated 10-8-1989 and No. GSR 886(E), dated 12-10-1989. (See also Rate of Interest, p. 3.190)

-    Deposit scheme for retiring employees of Public Sector Companies—Notification : No. 2/19/89-NS-II, dated 12-12-1990, as amended by GSR 232 & 233(E), dated 22-4-1991 and 23-4-1991, respectively. (See also Rate of Interest, p. 3.190)

n Notified account for purposes of section 10(15)(v)(b) :

-    Account No. 807/787 and 57/078049 with State Bank of India, Main Branch, Parliament Street, New Delhi in the name of Sir Ian Percival, Sole Trustee, Bhopal Hospital Trust—Notification : No. SO 635(E), dated 12-7-1995.

n Notified bonds under section 10(15)(vii) :

n Tax Free Municipal Bonds for an amount of rupees one hundred crore only to be issued by Municipal Corporation of Ahmedabad, Gujarat, during the financial year 2001-2002 for the purpose of said clause :

Provided that the benefit under the said sub-clause shall be admissible only if the holder of such bonds registers his or her name and the holding with the said Corporation—Notification No. SO 812(E), dated 21-8-2001.