Section 80L

Interest on securities, dividends, etc.

Notified scheme under section 80L(1)(iia) - National Deposit Scheme, 1984—Notification : No. GSR 453(E), dated 15-6-1985. Scheme discontinued from 1-4-1987—Notification : No. F. 4(13)-W&M/87, dated 31-3-1987.

Government further notifies that deposits under the said scheme received by the deposit offices up to the date of receipt by them of the Government’s decision regarding discontinuance of the Scheme, and which were retained with them shall be deemed to be valid deposits under the Scheme —Source: PIB Release, dated 16-5-1988.

Scheme notified under clause (iii) of sub-section (1):

  (a) The Scheme of Post Office (Time Deposits) governed by the Post Office (Time Deposits) Rules, 1970.

  (b) The Scheme of Post Office (Recurring Deposits) governed by the Post Office (Recurring Deposits) Rules, 1970—Notification : No. SO 2879, dated 1-9-1970.

  (c) National Saving Scheme as governed by National Saving Scheme Rules, 1992—Notification : No. GSR 820(E), dated 21-10-1992.

Bank specified under clause (via) of sub-section (1) - Industrial Development Bank of India—Notification : No. GSR 86(E), dated 29-2-1984.

Deposits under recurring/reinvestment schemes - In respect of deposits under the reinvestment deposit schemes, recurring deposit schemes, cash certificates and similar schemes, interest for each year calculated at the stipulated rate will be taxed as income accrued in that year. The benefit of deduction under section 80L will be available on such interest.—Circular: No. 243 [F.No. 178/65/77-IT(A-I)], dated 22-6-1978.

10-Year Social Security Certificates - In respect of the scheme of 10-Year Social Security Certificate the interest earned on the new certificates will be liable to income-tax on annual accrual basis.—Press Note: Dated 30-3-1982, issued by Press Information Bureau.

Deposits under National Deposit Scheme - In respect of deposits made under National Deposit Scheme in financial year 1984-85, interest up to 31-3-1985, will be deemed to have accrued on 31-3-1985 even though the actual payment or compounding is made on half-yearly basis.—Circular : No. 406 [F.No. 178/289/84-IT(A-I)], dated 15-1-1985.

Interest on bank deposits - Interest on deposits made with the nationalised banks will qualify for inclusion in the categories of income exempt from tax up to Rs. 3,000 (now Rs. 12,000) in a year —Circular : No. 64, dated 25-8-1971.

Interest on Kisan Vikas Patras - As interest on Kisan Vikas Patras has to be assessed to income-tax on accrual basis, the amount of interest accrued on these patras during initial 2½ years has to be determined in consultation with the Department of Economic Affairs. The amount of interest accrued on investment in Kisan Vikas Patras by an assessee is to be calculated on the basis of following table received from the Department of Economic Affairs wherein rate of interest and maturity amount for Rs. 100 denomination of Kisan Vikas Patras are given :

Period from the date of certificate of the date of its encashment

Purchase from 1-4-1998 to 15-12-1991

Purchase from 16-12-1991 to 23-4-1992

Purchase from 24-4-1992 to 1-9-1993

Purchase from 2-9-1993

Rate of interest

Maturity value

Rate of interest

Maturity value

Rate of interest

Maturity value

Rate of interest

Maturity value

 

(Notification dated 23-3-1998)

(Notification dated 6-12-1991)

(Notification dated 24-9-1992)

(Notification dated 2-9-1993)

(1)1 Year

10

1100

12

1120

12

1120

11

1110

(2) 2 Year

10

1220

12

1260

12

1260

11

1240

(3) 2 Years & 6 months

10

1280

12

1340

12

1340

11

1310

(4)3 years

11

1380

13

1460

13

1460

12

1420

(5) 3 years & 6 Months

11

1450

13

1550

13

1550

12

1500

(6) 4 years

12

1590

13.5

1690

13.5

1690

12.5

1620

(7) 4 years & 6 Months

12

1690

13.5

1800

13.5

1800

12.5

1730

(8) 5 years

13

1880

13.75

1940

2000

12.75

1860

(9)5 Years & 6 Months

2000

2100

2000

Note : Maturity values cited are calculated on half yearly compounding basis based on the rate of interest cited—Circular : No. 687, dated 19-8-1994.

(See Taxmann’s Direct Taxes Manual, Vol. 3, for updated Scheme with changed interest rates.)