SECTIONS 80C TO 8OVV

Deductions from total income

SECTION 8OC1 l LIFE INSURANCE pREmiA, CONTRIBUTIONS TO
PROVI
DENT FUND, ETC.
[SECTION 87 AS ORIGINALLY ENACTED/
SECTION 80A BETWEEN 1-4-1965 to 31-3-1968]

491. Life insurance premium receipts annexed with income-tax return - Instructions regarding their return to assessees

The present procedure is that life insurance premium receipts which are produced by the assessees in support of their claim under section 80C are made a part of income-tax records.  It has been suggested to the Board that policy-holders are frequently required by the LIC to show the original receipts towards proof of the payment of the premium.  The question as to how to deal with the request for return of the life insurance premium receipts has been considered by the Board.  It has been decided that wherever the assessees apply for return of life insurance premium receipts the same could be returned to them after recording a note  (under the Income-tax Officer’s signature with date) against the column provided for in the return claiming life insurance premium rebate, to the effect that “the claim has been verified with reference to the original receipts which have been returned to the assessee”.

Circular : No. 321 [F. No. 246/2/78-IT(A-II)], dated 15-1-1982.

492. Contributions made under the Maharashtra State Government Employees’ Group Insurance Scheme, 1982 - Whether eligible for relief under clause (a)(i) of sub-section (2)

1. Under the Maharashtra State Government Employees’ Group Insurance Scheme, 1982 which is to be introduced with effect from May 1, 1982 under the authority of the Government of Maharashtra, a compulsory insurance scheme would be started in which all existing and future officers of the State Govermnent are required to contribute a certain amount monthly for a life cover.

2. A question has been raised whether the Government servant’s monthly contributions under the scheme would be eligible for relief under section 80C(2)(a)(i).  This question has been considered and it is clarified that the contributions to the Maharashtra State Government Employees’ Group Insurance Scheme will be eligible for relief under section 80C, subject to the qualifying amounts prescribed in section 8OC(4).

Circular : No. 337 [F. No. 178/51/82-IT(A-I)], dated 4-5-1982.

493. Contributions made under the Central Government Employees’ Insurance Scheme - Whether eligible for relief under clause (a)(i) of sub-section (2)

1. Ministry of Finance vide its Office Memorandum No. F. 60/14/77-IC, dated 23-6-1977 has formulated a scheme known as the Central Government Insurance Scheme under which all Central Government servants on regular establishments (including work-charged staff) other than railway servants and persons paid from Defence Services Estimates have been provided with an insurance cover of Rs. 5,000.

2. A question has been raised whether the Government servant’s monthly contributions under the scheme would be eligible for relief under section 80C(2)(a)(i). This question has been considered and it is clarified that the contributions to the Central Government Employees’ Insurance Scheme will be eligible for relief  under section 80C, subject to the qualifying amounts prescribed in section 80C(4).

Circular : No. 233 [F. No. 178/33/77-IT (A-I)], dated 5-12-1977.

494. Special Frontier Force Group Insurance Scheme - Allowability of deduction of contributions made thereto under clause (a)(i) of sub-section (2)

1. The Cabinet Secretariat have introduced with effect from January 1, 1980 an insurance Scheme called the “Special Frontier Force Group Insurance Scheme” for the welfare of employees.  The objective of the Scheme is to provide, at a low cost and on a wholly contributory and self-financing basis, the benefits of an insurance cover for the families of the employees in the event of their death while in service and a lump sum payment to the employees on their retirement, discharge, etc., from service.

2. A question has been raised whether the contributions made by the officers and staff towards the Special Frontier Force Group Insurance Scheme would entitle the contributors to relief under section 80C(2)(a)(i) of the Income-tax Act.  It has been decided that the amount contributed by the employees of this organisation to the Special Frontier Force Group Insurance Scheme will be treated as an insurance premium and will qualify for relief subject to the condition imposed in section 80C(4).

Circular : No. 404 [F.  No. 178/50/82-IT (A-I)], dated 15-1-1985.

495. Whether the Karnataka Government Servants’ monthly contributions under Karnataka State Employees’ Group Insurance Scheme at a low cost and on a wholly contributory and self-financing basis would be eligible for deduction under section 80C

1. The Government of Karnataka has introduced Karnataka State Employees’ Group Insurance Scheme at a low cost and on a wholly contributory and self-financing basis for giving the twin benefits of an insurance cover to help their nominees in the event of death in service and a lump sum payment to augment their resources on retirement.

2. A question has been raised whether the Karnataka Government Servants’ monthly contributions under the Scheme would be eligible for deduction under section 80C(2)(a)(i) of the Income-tax Act, 1961. It is clarified that the contributions to the Karnataka State Government Employees’ Group Insurance Scheme, 1981 will be eligible for relief under section 80C of the Income-tax Act, 1961 subject to the limit as prescribed in section 80C(4) of the Income-tax Act, 1961.

Circular : No. 518, dated 9-8-1988.

496. Whether deduction is available in respect of premia paid on the life insurance policies on the lives of adult children, irrespective of their status; for example, premia paid on a policy on the life of a married daughter

1. Section 80C of the Income-tax Act allows, inter alia, deductions while computing the total income of an assessee of any sums paid in the previous year by the assessee individual out of his income chargeable to tax, to effect or to keep in force an insurance on the life of the assessee or on the life of the wife, or husband, or any child of the assessee.  Representations have been received by the Board regarding the availability of relief under this section in respect of premia paid on the life insurance policies on the lives of adult children, irrespective of their status; for example, premia paid on a policy on the life of a married daughter.

2. It is hereby clarified that relief under the said sections is available in respect of such cases also.  This relief will continue to be available under the new section, introduced by the Finance Act, 1990, as the language of the new section is in pari materia with that of section 80C of the Act.

Circular : No. 574, dated 22-8-1990.

497. Premium paid by proposer under children’s deferred endowment assurance - Whether eligible for deduction under clause (a)(i) of sub-section (2)l

1. A reference is invited to the instructions contained in the Board’s Circular Letter F. No. 14/8/66-IT(A-I), dated 6-4-1966, wherein it was stated that the premium paid by the proposer under the children’s deferred endowment is not eligible for rebate under section 87(1)(a)(i) [now section 80C(2)(a)(i)].  These instructions were based on the view expressed by the Gujarat High Court in the case of Chandulal Harjiwandas v. CIT [1964] 54 ITR 384.  The decision of the Gujarat High Court in the aforesaid case has since been reversed by the Supreme Court in [1967] 63 ITR 627.  Also under the Finance Act, 1966, premium paid under the children’s deferred endowment assurance has been made eligible for rebate under section 80A [as it stood before April 1, 1968].

2. In view of the above developments, the instructions contained in the Board’s Circular letter of April 6,1966, referred to above, should be considered as cancelled.  The position thus is that the premium paid by the proposer under the children’s deferred endowment assurance should be held to be eligible for rebate under section 87(1)(a)(i).

Letter : F. No. 14/8/66-IT (A-I), dated 25-5-1967.

498. Premium paid on pure endowment assurance policy - Whether eligible for deduction under clause (a)(i) of sub-section (2)

A question has been raised whether the premium paid by an assessee in respect of a pure endowment assurance policy will entitle him to claim rebate under section 87(1)(a)(i) [now section 80C(2)(a)(i)].  The matter has been carefully considered and the Board are advised that a pure endowment assurance policy is an assurance on the life of the assessee and  hence the premium paid on such policy would be eligible to rebate under section 87(1)(a)(i).

Letter : F. No. 14/18/61-IT (A-I), dated 14-8-1962.

499. Premium paid on contracts for deferred annuity with cash option - Whether eligible for deduction under clause (a)(ii) of sub-section (2)

According to the amendment made to section 80A by section 15 of the Finance Act, 1966, premiums paid by an assessee on contracts for deferred annuity on life with a cash option, also qualify for deduction  under section 80A in respect of assessments for the assessment year 1966-67 onwards.  It has now been decided by the Board that the above position would hold good even in respect of the assessment years prior to assessment year 1966-67.  Further, the premium, paid on a pure endowment assurance policy would be eligible for rebate under section 87(1)(a)(i).

Letter : F. No. 1(305)/66-TPL, dated 16-3-1967.1

500. Contributions to family pension fund established under Employees’ Provident Fund and Family Pension Fund Act -Whether covered under clause (a)(ii) of sub-section (2)

1. The question whether contributions to family pension fund established by a scheme under the Employees’ Provident Fund and Family Pension Fund Act, 1952, will be entitled to the relief under section 80C(2)(a)(ii) has been considered by the Board.

2. The provision contained in section 80C(2)(a)(ii) is wide enough to include the contributions made towards the family pension fund established by a scheme under the Employees’ Provident Fund and Family Pension Fund Act, 1952, for determining the aggregate of sums qualifying for deduction under section 80C(1).

Circular : No. 194 [F.  No. 167/37/71-IT (A-I)], dated 20-3-1976.

501.      Deductions of - Life insurance premia, etc. - Notified scheme under section 80C(2)(a)(vi)

In exercise of the powers conferred by sub-clause (vi) of clause (a) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the ‘Dhanaraksha 1989’ plan of the LIC Mutual Fund referred to in aforesaid sub-clause as the unit-linked insurance plan of the Mutual Fund for the purposes of the aforesaid sub-clause.

Notification : No.  GSR 55(E), dated 6-2-1990.

502. Repayment of loans, etc., taken for purchase/construction of house - Whether deduction admissible under sub-clause (ii) of clause (b) of sub-section (2) where construction of house is still continuing during previous year relevant to assessment year 1988-89

1. I am directed to refer to para 4(8)(e)(ii) of this Department’s Circular No. 489 [F.  No. 275/51/87-IT(B)], dated 25-6-1987 [see under section 192] wherein the incentives provided under section 80C to the income-tax payers in respect of housing loans, etc., taken from specified institutions have been explained.

2. References have been received from some quarters enquiring whether the repayment of loans taken for the purchase or construction of a new residential house property, the construction of which is still continuing would qualify for deduction under section 80C.

3. According to the provisions of sub-clause (ii) of clause (h) of sub-section (2) of section 80C, in computing the total income of an assessee, a deduction shall be allowed for any sum paid towards the purchase or construction of a residential house property subject to the fulfilment of the conditions laid down therein.  For the admissibility of this deduction, the construction of the house property should be completed after 31-3-1987 and the income from the same should be chargeable to tax under the head ‘Income from house property’ in the relevant assessment year.  For the guidance of Drawing and Disbursing Officers and other persons responsible for the payment of income chargeable under the head ‘Salaries’, it is clarified that in a case where the construction of the property does not get completed by the end of the previous year relevant to the assessment year 1988-89, no deduction under this provision shall be admissible to the assessee in the assessment of his income for this assessment year.  This aspect may please be kept in mind while deducting the tax at source under section 192 in the financial year 1987-88.

Circular : No. 498 [F. No. 275/111/87-IT(B)], dated 4-11-1987.

503. National Savings Certificates (VI Issue/VII Issue)1 notified under clause (h) of sub-section (2) for purposes of deduction of subscription thereto

NOTIFICATION 1

1. In exercise of the powers conferred by clause (h) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the National Savings Certificates (VI Issue) (Annex I) and the National Savings Certificates (VII Issue)2 (Annex II) as securities for the purposes of the said clause.

2. This notification shall come into force on the 2nd of April, 1983.

Notification : No. GSR 111(E), dated 28-2-1983.

ANNEX I - NATIONAL SAVINGS CERTIFICATES (VI ISSUE) RULES, 19813
VIDE
GSR 309(E), DATED 24-4-1981

In exercise of the powers conferred by section 12 of the Government Savings Certificates Act, 1959 (46 of 1959), the Central Government hereby makes the following rules, namely :—

1. Short title, commencement and application - (1) These rules may be called the National Savings Certificates (VI Issue) Rules, 1981.

(2) They shall come into force on the 1st day of May, 1981.

(3) They shall apply to the National Savings Certificates (VI Issue).

2. Definitions - In these rules, unless the context otherwise requires—

      (i)  “Act” means the Government Savings Certificates Act, 1959 (46 of 1959);

    (ia)  “cash” means cash in Indian currency;

     (ii)  “certificate” means the National Savings Certificates (VI Issue);

    (iii)  “co-operative society” means a society registered or deemed to have been registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force;

    (iv)  “corporation” means a corporation established by or under any law for the time being in force, but does not include a company;

     (v)  “Form” means a form appended to these rules;

    (vi)  “Government company” means a company as defined in section 617 of the Companies Act, 1956 (1 of 1956);

   (vii)  “identity slip” means an identity slip issued to a holder of a certificate under rule 12;

  (viii)  “local authority” means a municipal corporation, municipal committee, district board, body of port Commissioners or other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund;

(viiia)  “non-resident” has the meaning assigned to it in clause (30) of section 2 of the Income-tax Act, 1961 (43 of 1961);

    (ix)  “old certificate” means a certificate issued under the Post Office Savings Certificates Rules, 1960, or the National Savings Certificates (First Issue) Rules, 1965, or the National Savings Certificates (IV Issue) Rules, 1970, or the National Savings Certificates (V Issue) Rules, 1973, or a Bond issued under the National Development Bonds Rules, 1977;

     (x)  “post office” means any post office in India doing savings bank work;

    (xi)  “resident in India” has the meaning assigned to it in the Income-tax Act, 1961 (43 of 1961).

**

**

**

3A. Discontinuance of National Savings Certificates (VI issue) in denomination of Rs. 10 - (1). On and from the 1st day of April, 1986, the National Savings Certificates (VI Issue) in denomination of Rs. 10 shall be discontinued.

(2) Notwithstanding anything contained in sub-rule (1), these rules shall continue to apply to any certificate in denomination of Rs. 10 purchased before the 1st day of April, 1986.

**

**

**

6. Procedure for purchase of certificate - Any person desiring to purchase a certificate, shall present at a post office, an application—

  (i)  in Form 1, or

(ii)  if such application is made by any person referred to in the proviso to this rule or rule 8, in Form 1A (obtainable free of cost at all post offices), either in person or through an authorised agent of the Small Savings Schemes :

Provided that where the applicant is an individual not being a citizen of India or not being a person of Indian origin, who is a non-resident, or, as the case may be, who is not resident in India, prior approval of the Reserve Bank of India for the purchase of the certificate shall be necessary.

Explanation : For the purposes of this rule, a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

7. Purchase of certificates on behalf of others - A person or body specified in column I of the Table below may purchase certificate(s) on behalf of persons specified against his or its name in the corresponding entry in column II of the said Table :

Provided that the persons specified in the said column II are eligible under these rules to purchase certificates.

TABLE

I

II

Persons or body who can purchase

On behalf of

(i)

an adult.

a minor

(ii)

a co-operative society including a co-operative bank or a scheduled bank.

its members, clients, employees or contractors whose moneys are held as a deposit or otherwise with such society or bank.

(iii)

a Gazetted Government Officer, an officer of a Government company or of a corporation or of a local authority, or an officer of a corporate body like a marketing committee established under a State Act and authorised by the State Government in this behalf in his official capacity or the Reserve Bank of India.

person whose moneys are held as deposit or otherwise with such officer or the Reserve Bank.

8. Legal tender - Payment for the purchase of a certificate may be made to a post office in any of the following modes, namely :—

  (i)  cash;

(ii)  a cheque, pay order or demand draft drawn in favour of the Postmaster;

(iii)  duly signed withdrawal form together with the pass book for withdrawal from the post office savings bank account;

(iv)  surrender of a matured old certificate duly discharged as follows :—

       “Received payment through issue of fresh certificate, vide application attached”:

Provided that where the applicant is an individual, being a citizen of India or a person of Indian origin who is a non-resident or, as the case may be, who is not resident in India, he shall, if he desires to avail of the benefits under clause (4B) of section 10 of the Income-tax Act, 1961 (43 of 1961), or clause (xvic) of sub-section (1) of section 5 of the Wealth-tax Act, 1957 (27 of 1957), or clause (iid)  of sub-section (1) of section 5 of the Gift-tax Act, 1958 (18 of 1958), as the case may be, make such payment only in any of the following modes, namely:—

(a)  a cheque in favour of the Postmaster drawn by the applicant on his Non-Resident (External) Account with a bank branch in India;

(b)  a demand draft or pay order in favour of the Postmaster issued by a bank branch in India by debit to the applicant’s Non-Resident (External) Account or by withdrawal from his Foreign Currency (Non-Resident) Account together with a certificate from the said bank branch stating that the said demand draft or pay order has been issued by debit to or withdrawal from the said account;

  (c)  a demand draft drawn in favour of the Postmaster by a bank in a country outside India on its branch or correspondent bank in India;

(d)  cash, together with foreign inward remittance certificate or bank certificate indicating conversion of foreign exchange in rupees or bank certificate issued in favour of the applicant stating that the funds have emanated from the applicant’s Non-Resident (External) Account or Foreign Currency (Non-Resident) Account.

Explanation :  For the purposes of this rule a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

9. Issue of certificates - (1) On payment being made under rule 8, except where payment is made by a cheque, pay order or demand draft, a certificate shall normally be issued immediately, and the date of such certificate shall be the date of payment.

(2) Where payment for the purchase of a certificate is made by a cheque, pay order or demand draft, the certificate shall not be issued before the proceeds of the cheque, pay order or demand draft, as the case may be, are realised and the date of such certificate shall be the date of encashment of the cheque, pay order or demand draft, as the case may be :

Provided that where the payment for purchase of certificate or certificates is made by means of a cheque,  pay order or demand draft expressed in a foreign currency and the proceeds thereof are not equivalent to the face value of the certificate or the certificates applied for, a certificate or certificates shall be issued for the maximum aggregate face value possible within the said proceeds but in any case not exceeding the aggregate face value of the certificate or the certificates applied for and any balance amount of the said proceeds shall be refunded to the applicant or to any person authorised by him to receive such amount or credited to the savings account, if any, of the applicant in the post office savings bank :

Provided further that where the payment is made in the manner specified in clause (a) of the proviso to rule 8, the certificate shall be issued only after the post office receives an intimation from the drawee bank branch that the cheque has been paid by debit to the applicant’s Non-Resident (External) Account with the said drawee bank branch.

(3) If for any reason a certificate cannot be issued immediately, a provisional receipt shall be given to the purchaser which may later be exchanged for a certificate and the date of such certificate shall be as specified in sub-rule (1) or sub-rule (2), as the case may be.

10. Certificate in lieu of proceeds of old certificate.—A holder of an old certificate entitled to encash that certificate may make an application in Form 1 for the grant of a certificate under these rules; on receipt of such an application, there shall be issued to the applicant a certificate under these rules, the date of issuing being the date on which the old certificate duly discharged is presented :

Provided that the facility of issue of a certificate in lieu of an old certificate specified in this rule shall not be available to a person who is a non-resident or, as the case may be, who is not resident in India :

**

**

**

18. Nomination - Subject to the provisions of sub-rules (2) to (6) the single holder or joint holders of a certificate may, by filling in necessary particulars in Form 1 or, as the case may be, Form 1A at the time of purchasing the certificate, nominate any person who, in the event of death of the single holder or both the joint holders, as the case may be, shall become entitled to the certificate and to the payment of the amount due thereon.  If such nomination is not made at the time of purchasing the certificate, it may be made by the single holder, the joint holders or the surviving joint holder, as the case may be, at any time after the purchase of the certificate but before its maturity, by means of an application in Form 2 to the Postmaster of the office at which the certificate stands registered.

19. Encashment on maturity - 1[(1)] The maturity period of a certificate of any denomination shall be six years commencing from the date of the certificate.  The amount, inclusive of interest, payable on encashment of a certificate, at any time after the expiry of its maturity period shall be Rs. 201.50 for the denomination of Rs. 100 and at proportionate rate for any other denomination. The interest as specified in the Table below shall accrue to the holder or holders of the certificate at the end of each year and the interest so accruing at the end of each year up to the end of the fifth year shall be deemed to have been re-invested on behalf of the holder and aggregated with the amount of face value of the certificate :

TABLE

The year for which interest accrues

Amount of interest accruing on certificate of Rs. 100 denomination

 

Rs.

First year

12.40

Second year

13.90

Third year

15.60

Fourth year

17.50

Fifth year

19.70

Sixth year

22.40

Note : The amount of interest accruing on a certificate of any other denomination shall be proportionate to the amount specified in the Table above:

Provided that where a certificate has been purchased on or after the 1st March, 1983, by or on behalf of an individual specified in the proviso to rule 8 and payment, therefor has been made in any of the modes specified in the said proviso, the amount inclusive of interest payable on encashment of the certificate at any time after the expiry of its maturity period shall be Rs. 213 for the denomination of Rs. 100 and at proportionate rate for any other denomination.  The interest as specified in the Table below shall accrue to the holder or holders of such certificate at the end of each year and the interest so accrued at the end of each year up to the end of the fifth year shall be deemed to have been reinvested on behalf of the holder and aggregated with the amount of face value of the certificate.

TABLE

The year for which interest accrues

Amount of interest accruing on certificate of Rs. 100 denomination

 

Rs.

First year

13.40

Second year

15.20

Third year

17.30

Fourth year

19.60

Fifth year

22.20

Sixth year

25.30

Note : The amount of interest accruing on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.

2[(2) Where a certificate has been purchased on or after the 1st day of April, 1987, the amount, inclusive of interest, payable on encashment of the certificate at any time after the expiry of its maturity period shall be Rs. 190.10 for denomination of Rs. 100 and at proportionate rate for any other denomination.  The interest as specified in the Table below shall accrue to the holder or holders of the certificate at the end of each year and the interest so accrued at the end of each year up to the end of the fifth year shall be deemed to have been reinvested on behalf of the holder and aggregated with the amount of face value of the certificate :

TABLE

The year for which interest accrues

Amount of interest accruing on a certificate of Rs. 100 denomination

 

Rs.

First year

11.30

Second year

12.60

Third year

14.00

Fourth year

15.60

Fifth year

17.30

Sixth year

19.30

Note : The amount of interest accruing on a certificate of any other denomination shall be proportionate to the amount specified in the Table above].

20. Premature encashment - (1) Notwithstanding anything contained in rule 19, and subject to sub-rules (2), (3) and (4), certificate purchased on or after the 1st day of April, 1986, may be prematurely encashed in any of the following circumstances, namely :—

(a)  on the death of the holder or both the holders in case of joint holders;

(b)  on forfeiture by a pledgee being a Gazetted Government Officer, when the pledge is in conformity with these rules;

  (c)  when ordered by a court of law.

(2) If a certificate is encashed under sub-rule (1) within a period of one year from the date of the certificate, only the face value of the certificate shall be payable and no interest shall be payable.

(3) If a certificate is encashed under sub-rule (1) after the expiry of one year but before the expiry of three years from the date of certificate, the encashment shall be at a discount.  On encashment of the certificate, an amount equivalent to the face value of the certificate together with simple interest shall be payable.  Such simple interest shall be calculated on the face value, at the rate applicable from time to time to single accounts under the Post Office Savings Account Rules, 1981, for the complete months for which the certificate has been held.  The difference between the aforesaid simple interest and the interest accruing under rule 19 shall be deemed to be the discount.

(4) If a certificate is encashed under sub-rule (1) after the expiry of three years from the date of the certificate, the amount payable inclusive of interest accrued under rule 19 and after adjustment of discount shall be as specified in the Table below for a certificate of Rs. 100 denomination and at a proportionate rate for a certificate of any other denomination :

TABLE

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

Amount payable, inclusive of interest

 

Rs.

3 years or more, but less than 3 years and 6 months

132.00

3 years and 6 months or more, but less than 4 years

138.50

4 years or more, but less than 4 years and 6 months

145.00

4 years and 6 months or more, but less than 5 years

152.00

5 years or more, but less than 5 years and 6 months

159.00

5 years and 6 months or more, but less than 6 years

166.50

 

**

**

**

28. Income-tax - Interest on these certificates shall be liable to tax under the Income-tax Act, 1961 (43 of 1961), on the basis of the annual accrual specified in rule 19, but no tax shall be deducted at the time of payment of discharge value :

Provided that such interest shall not, in the case of certificates purchased under rule 6 or rule 7 by or on behalf of a person who is a non-resident, be liable to tax subject to the fulfilment of the conditions specified in this behalf in the said Act.

28A. Wealth-tax - Subject to the conditions specified in this behalf in the Wealth-tax Act, 1957 (27 of 1957), wealth-tax shall not be payable in respect of certificates purchased under rule 6 or rule 7 by or on behalf of a person who is not resident in India.

28B. Gift-tax - Subject to the conditions specified in this behalf in the Gift-tax Act, 1958 (18 of 1958), gift-tax shall not be charged in respect of gifts made by a person who is not resident in India to any relative of such person in India in the form of certificates purchased by such person under rule 6 or on his behalf under rule 7.

29. Fees - (1) A fee of rupee one in the case of a certificate of the denomination of Rs. 500 or above and a fee of twenty-five paise in any other case, shall be chargeable in respect of the following transactions, namely :—

  (i)  transfer of certificate from one person to another, other than a transfer from the holder to a court of law or under the orders of a court of law;

(ii)  issue of a duplicate certificate under rule 17;

(iii)  issue of a certificate of discharge under rule 22;

(iv)  conversion from one denomination to another under rule 27:

Provided that no fee shall be chargeable in respect of such transactions in the case of a certificate purchased by a person who is a non-resident or, as the case may be, who is not resident in India.

Explanation 1 : The fee to be charged for the issue of a certificate of discharge under clause (iii) shall be calculated separately on the aggregate face value of all certificates which were purchased on any one application and which are included for discharge certificate.

Explanation 2 :  The fee to be charged for a conversion under clause (iv) shall be based on the number and denomination of the certificates required to be issued on such conversion.

(2) A fee of fifty paise shall be chargeable on every application for registration of nomination, or of any variation in nomination or cancellation thereof :

Provided that no fee shall be charged on an application for registration of the first nomination :

Provided further that no fee shall be charged in the case of a certificate purchased by a person who is a non-resident or, as the case may be, who is not resident in India.

30. Responsibility of the post office - The post office shall not be responsible for any loss caused to a holder by any person obtaining possession of a certificate and fraudulently encashing it.

31. Rectification of mistakes - The Director General, Posts and Telegraphs or the Postmaster-General or heads of Postal Divisions in their respective jurisdictions, may either suo motu  or upon an application by any person interested in any certificate issued in pursuance of these rules, rectify any clerical or arithmetical mistakes with respect to that certificate, provided that it does not involve any financial loss to the Government or to any such person.

32. Power to relax - Where the Central Government is satisfied that the operation of any of the provisions of these rules causes undue hardship to the holder or holders of a certificate, it may, by order, for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.

1FORM 1

[See  rules 6, 10 and 18]

Form of application for purchase of National Savings

Certificates (VI Issue)

Serial No...................

To

The Postmaster ........................................................... Post Office ........................................................... I/We, hereby tender Rs. ............................................. (Rupees ................................................... only) in cash/by cheque No. ............................ for the purchase of National Savings Certificates (VI Issue), of the type Single/Joint A/Joint B/

(a) in the name(s) of ................................................ and ..................................................

(b) in case of minor, his date of birth ................................................ encashable by the minor’s parent/guardian Shri/Smt. ................................................

(c) in the name of ......................................................................... (members, etc.) .................................................... through ............................................... (society or company, etc.)

2. I/We nominate the person(s) named below who shall, on my/our death, receive payment :

 

Sl. No.

Name of nominee

Full address

Date of birth of minor nominee

1.

 

 

 

 

2.

 

 

 

 

3. I/We, hereby agree to abide by the National Savings Certificates (VI Issue) Rules, 1981.

4. The certificate/identity slip may be made over to my/our agent Authority No. ............... or messenger who presents this application.

 

......................................................................

Signature/thumb impression of investor(s)

Date ................................................

Address .................................................

..................................................................

Signature and address of witness

to nomination

 

 

Date ...............................

.........................................................................................

Received the certificate(s) and identity slip

.........................................................................................

Signature of investor/messenger authorised
agent

Detele whichever is not applicable.

 

Identity Slip

Specimen signature

To be completed by the post office

Sl. No. of certificates

Issue price Rs.

Date of encashment

Initials of the Postmaster

Remarks like transfer, issue of duplicates, etc., with initials

1

2

3

4

5

 

 

 

 

 

 

 

 

 

TOTAL

 

 

 

 

 

Date............................                                                                                               ..........................................................

                                                                                                                Signature of Postmaster

FORM 1A

[See rules 6 and 18(1)]

indian posts and telegraPHs department

Form of application for purchase of National Savings Certificates (VI Issue)

by non-resident or person who is not resident in India

Serial No. ..................

1. I/We hereby apply for the purchase of National Savings Certificates (VI Issue) as detailed below :

PARTICULARS OF CERTIFICATES REQUIRED*

Denomination

(Rs.)

Number of certificates

Total face value

Rs.

Type of joint certificates required (‘A’ or ‘B’ type)

5,000

 

 

 

1,000

 

 

 

500

 

 

 

100

 

 

 

50

 

 

 

Total

 

 

 

*To be filled only for joint holding.

Joint ‘A’ type Certificate is payable to both holders jointly or to the survivor; joint ‘B’ type is payable to either or survivor.

†(a)  in my/our name(s) $ .........................................

†(b)  on behalf of minor $ .........................................

         Date of birth of minor .....................................

          (*)  Certificate to be made encashable by father/mother/either parent/legal guardian of the minor.

(c)     (**) in the name of £.......................... through.............................................................................

[Name and address of bank branch]

†Strike out (a)/(b)/(c) if not applicable.

$ Give in block capitals name(s) with aliases, if any, address and country of residence.

(*) Strike out any or all of the alternatives, if not required.

(**) For scheduled bank on behalf of client having Non-Resident (External)/Foreign Currency (Non-Resident) Account with the bank.

*2.  I/We tender herewith towards the purchase price of the certificates applied for :

   (a)  Cheque No. ...................... dated ......................... in favour of the Postmaster ........................................... for Rs. .................... [Name of Post Office] (Rupees...........................) drawn on my/our

         ................................................................ Non-Resident (External) Account No. ............................................. with................................................................................................................................................. [Name and address of bank branch in India]

**(b) Demand draft/pay order No............................................ dated........................................ in favour of the Postmaster................................................................................................................................................. [Name of Post Office]

         for Rs. .................................................................. (Rupees...................................................................) issued by ......................................................................................................................................................................... [Names and address of bank branch in India]

         by debit to Non-Resident (External) Account No. ............................................... or by withdrawal of equivalent funds from Foreign Currency (Non-Resident) Account No................................................................................................ of ................................................................................................................................................................................. [Name(s) and address of applicant(s)]

         together with a certificate from the said bank confirming that the draft/pay order has been issued by debit to or withdrawal from the account referred to above.

(c)     Demand draft No. ................................................................ dated.................... in favour of the Postmaster.................................................................................................................................................................... for*** .................................................................................... [Name of Post Office]

         drawn by....................................................................................................................................................... [Name and address of bank in a country outside India]

on............................................................................................................................................................ [Name and address of its branch or corresponding bank in India]

   (d)  A sum of Rs. ............................ (Rupees..............................) in cash together with foreign inward remittance certificate/bank certificate indicating conversion of foreign exchange in rupees/bank certificate indicating that the funds have emanated from my/our Non-Resident (External)/Foreign Currency (Non-Resident) Account No. .....…......................…..issued in my/our favour by........................................................................................................ [Name and address of the bank concerned]

*Fill up (a)/(b)/(c)/(d) as the case may be and delete the rest.

**For applicant(s) or for a scheduled bank or on behalf of client applicant(s).

***Amount in Indian or foreign currency, as the case may be, in words and figures.

3. I/We agree that—

*(a)  in cases where the Post Office requires a bank certificate showing the source of funds out of which the certificates are to be purchased, the certificates will be issued to me/us only on receipt of such bank certificate by the Post Office;

**(b) in cases the proceeds of the cheque/demand draft are less than the face value of certificate(s) applied for, certificate(s) may be issued for the maximum possible total face value within such proceeds;

$(c)  in case such proceeds are more than the face value of certificate(s) applied for, certificate(s) may be issued as applied for; and

       $ in either case, any balance amount of the proceeds may be refunded to...........….................................................................. [Name and address of person] who is hereby authorised by me/us to receive the same; or

(d)  credited to my savings account No. ........................................................................... in post office savings bank...................................................................................................................................... [Name of Post Office]

*Applicable where the required bank certificate is not submitted with the application.

**Applicable only for cheque/draft expressed in foreign currency.

$ Delete (c) or (d), as the case may be.

4. *I/We declare that *I am/we are citizen(s) of India/person(s) of Indian origin.

Note : A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

5. *I/We agree to abide by the National Savings Certificates (VI Issue) Rules, 1981.

6. *I/We do/do not require identity slip.

Note : No identity slip shall be issued to a person other than the one authorised, vide  paragraph 1(b) above in case of purchase on behalf of a minor.

...........................................................

..................................................................

Signature

Signature

[(not thumb impression) of the person(s) authorised, if any, as per paragraph 1(b) above]

[or thumb impression, (if illiterate) of applicant(s)**]

Date..................................

Date.....................................

Address...........................

Address..............................

*Strike out portions not applicable.

**If the applicant is illiterate, his father’s name may also be given.

$The certificate(s) and the identity slip may be made over to Shri/Smt. ................................. Agent (Authority No. ............) or messenger who presents this application.

..............................................................

Signature

(or thumb impression, if

illiterate) of investor(s)

Date........................................................

*To be signed or thumb impression affixed only when the investor does not take delivery of certificates personally.

7. Received the certificate(s) detailed above $ and identity slip.

............................................................

.............................................................................

$$ Marks of identification of applicant(s)

Signature or thumb impression of purchaser or his agent/messenger (in case of authorised agent his Authority No. should be given)

 

.............................................................................

 

$$ Specimen signature(s) of applicant(s)

$ Cross out, if the identity slip is not required.

$$ To be furnished if identity slip is required under paragraph 6 and if the application is submitted through an agent, messenger of scheduled bank.

$8. Under provisions of section 6(1) of the Government Savings Certificates Act, 1959, I/we................... the holder(s) of Savings Certificate(s) mentioned in this application, hereby nominate the person(s) mentioned below who shall, on my/our death, become entitled to the Savings Certificate(s) and the amount due thereon to the exclusion of all other persons :

Sl. No.

Name(s) of the nominee(s)

Full Address

Date of birth of nominee, if minor

 

 

 

 

 

 

 

 

 

$ Strike out portions not applicable.

As the nominee(s) at Serial No.(s) .................................................................... above is/are minor(s), I/we appoint Shri/Smt./Kumari............................................................................................................................................. [Name and full address] as the person to receive the amount due thereon in the event of my/our death during the minority of the nominee(s).

...........................................................................

............................................................

Signature and full address of witness

Signature (or thumb impression, if illiterate) of holder(s)

 

TO BE COMPLETED BY THE POST OFFICE

Sl. No. of certificate

Issue price

Rs.

Date of encashment of certificate

Initials of Postmaster

Remarks like transfer, issue of duplicate, etc., and initials of Postmaster

1

2

3

4

5

 

 

 

 

 

 

 

 

 

 

 

 

Total number of National Savings Certificates (VI Issue)

*Amount realised Rs..............................................................................

Certificate(s) issued for Rs. ...............................................................

Amount refunded as per paragraph 3(b) Rs...............................

Date..........................

..........................................................

Signature of Postmaster

*In case of investment by cheque/demand draft in foreign currency.

annex ii - national savings certificates (vii issue) rules, 1981 -
vide
gsr 310(E), dated 24-4-1981*

In exercise of the powers conferred by section 12 of the Government Savings Certificates Act, 1959 (46 of 1959), the Central Government hereby makes the following rules, namely :—

1. Short title, commencement and application - (1) These rules may be called the National Savings Certificates (VII Issue) Rules, 1981.

(2) They shall come into force on the 1st day of May, 1981.

(3) They shall apply to the National Savings Certificates (VII Issue).

2. Definitions - In these rules, unless the context otherwise requires :—

  (i)  “Act” means the Government Savings Certificates Act, 1959 (46 of 1959);

(ia)     “cash” means cash in Indian currency;

(ii)  “certificate” means the National Savings Certificate (VII Issue);

(iii)  “co-operative society” means a society registered or deemed to have been registered under the Co-operative Societies Act, 1912, or under any other law for the time being in force;

(iv)  “corporation” means a corporation established by, or under any law for the time being in force, but does not include a company;

(v)  “Form” means a form appended to these rules;

(vi)  “Government company” means a company as defined in section 617 of the Companies Act, 1956 (1 of 1956);

(vii) “identity slip” means an identity slip issued to a holder of a certificate under rule 12;

(viii)    “local authority” means a municipal corporation, municipal committee, district board, body of port commissioners or other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund;

(viiia)  “non-resident” has the meaning assigned to it in clause (30) of section 2 of the Income-tax Act, 1961 (43 of 1961);

(ix)  “old certificate” means a certificate issued under the Post Office Savings Certificates Rules, 1960, or the National Savings Certificates (First Issue) Rules, 1965, or the National Savings Certificates (IV Issue) Rules, 1970, or the National Savings Certificates (V Issue) Rules, 1973, or a Bond issued under the National Development Bonds Rules, 1977;

  (x)  “post office” means any post office in India doing savings bank work;

(xi)  “resident in India” has the meaning assigned to it in the Income-tax Act, 1961 (43 of 1961).

**

**

**

6. Procedure for purchase of certificate - Any person desiring to purchase a certificate, shall present at a post office, an application—

  (i)  in Form 1, or

(ii)  if such application is made by any person referred to in the proviso to this rule or rule 8, in Form 1A (obtainable free of cost at all post offices), either in person or through an authorised agent of the Small Savings Schemes :

Provided that where the applicant is an individual not being a citizen of India or not being a person of Indian origin, who is a non-resident or, as the case may be, who is not resident in India, prior approval of the Reserve Bank of India for the purchase of the certificate shall be necessary.

Explanation : For the purposes of this rule, a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

7. Purchase of certificates on behalf of others - A person or body specified in column I of the Table below may purchase certificate(s) on behalf of persons specified against his or its name in the corresponding entry in column II of the said Table :

Provided that the persons specified in the said column II are eligible under these rules to purchase certificates.

TABLE

I

II

Person or body who can purchase

On behalf of

(i)

an adult

A minor

(ii)

a co-operative society including a co-operative bank, or a scheduled bank.

its members, clients, employees or contractors whose moneys are held as deposit or otherwise with such society or bank.

(iii)

a Gazetted Government Officer, an officer of a Government company or of a corporation or of a local authority, or an officer of a corporate body like a marketing committee established under a State Act and authorised by the State Government in this behalf, in his official capacity, or the Reserve Bank of India

persons whose moneys are held as deposit or otherwise with such officer or the Reserve Bank

8. Legal tender - Payment for the purchase of a certificate may be made to a post office in any of the following modes, namely :—

  (i)  cash;

(ii)  a cheque, pay order or demand draft drawn in favour of the Postmaster;

(iii)  duly signed withdrawal form together with the pass book for withdrawal from the post office savings bank account;

(iv)  surrender of a matured old certificate duly discharged as follows:

       “Received payment through issue of fresh certificate, vide application attached”:

Provided that where the applicant is an individual, being a citizen of India or a person of Indian origin who is a non-resident or, as the case may be, who is not resident in India, he shall, if he desires to avail of the benefits under clause (4B) of section 10 of the Income-tax Act, 1961 (43 of 1961), or clause (xvic) of sub-section (1) of section 5 of the Wealth-tax Act, 1957 (27 of 1957), or clause (iid) of sub-section (1) of section 5 of the Gift-tax Act, 1958 (18 of 1958), as the case may be, make such payment only in any of the following modes, namely :—

(a)  a cheque in favour of the Postmaster drawn by the applicant on his Non-Resident (External) Account with a bank branch in India;

(b)  a demand draft or pay order in favour of the Postmaster issued by a bank branch in India by debit to the applicant’s Non-Resident (External) Account or by withdrawal from his Foreign Currency (Non-Resident) Account together with a certificate from the said bank branch stating that the said demand draft or pay order has been issued by debit to or withdrawal from the said account;

  (c)  a demand draft drawn in favour of the Postmaster by a bank in a country outside India on its branch or corresponding bank in India;

(d)  cash, together with foreign inward remittance certificate or bank certificate indicating conversion of foreign exchange in rupees or bank certificate issued in favour of the applicant stating that the funds have emanated from the applicant’s Non-Resident (External) Account or Foreign Currency (Non-Resident) Account.

Explanation : For the purposes of this rule, a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

9. Issue of certificates - (1) On payment being made under rule 8 except where payment is made by a cheque, pay order or demand draft, a certificate shall normally be issued immediately, and the date of such certificate shall be the date of payment.

(2) Where payment for the purchase of a certificate is made by a cheque, pay order or demand draft, the certificate shall not be issued before the proceeds of the cheque, pay order or demand draft, as the case may be, are realised and the date of such certificate shall be the date of encashment of the cheque, pay order or demand draft, as the case may be :

Provided that where the payment for purchase of certificate/certificates is made by means of a cheque, pay order or demand draft expressed in a foreign currency and the proceeds thereof are not equivalent to the face value of the certificate or the certificates applied for, a certificate or certificates shall be issued for the maximum aggregate face value possible within the said proceeds but in any case not exceeding the aggregate face value of the certificate or the certificates applied for and any balance amount of the said proceeds shall be refunded to the applicant or to any person authorised by him to receive such amount or credited to the savings account, if any, of the applicant in the post office savings bank :

Provided further that where the payment is made in the manner specified in clause (a) of the proviso to rule 8 the certificate shall be issued only after the post office receives an intimation from the drawee bank branch that the cheque has been paid by debit to the applicant’s Non-resident (External) Account with the said drawee bank branch.

(3) If for any reason a certificate cannot be issued immediately, a provisional receipt shall be given to the purchaser which may later be exchanged for a certificate and the date of such certificate shall be as specified in sub-rule (1) or sub-rule (2), as the case may be.

10. Certificate in lieu of proceeds of old certificate - A holder of an old certificate entitled to encash that certificate may make an application in Form 1 for the grant of a certificate under these rules; on receipt of such an application, there shall be issued to the applicant a certificate under these rules, the date of issue being the date on which the old certificate duly discharged is presented :

Provided that the facility of issue of a certificate in lieu of an old certificate specified in this rule shall not be available to a person who is a non-resident or, as the case may be, who is not resident in India.

**

**

**

18. Nomination - (1) Subject to the provisions of sub-rules (2) to (6), the single holder or joint holders of a certificate may, by filling in necessary particulars in Form 1 or, as the case may be, Form 1A at the time of purchasing the certificate, nominate any person who, in the event of death of the single holder or both the joint holders, as the case may be, shall become entitled to the certificate and to the payment of the amount due thereon.  If such nomination is not made at the time of purchasing the certificate, it may be made by the single holder, the joint holders or the surviving joint holder, as the case may be, at any time after the purchase of the certificate but before its maturity, by means of an application in Form 2 to the Postmaster of the post office at which the certificate stands registered.

(2) There shall not be more than one nominee, except in cases where the denomination of a certificate is Rs. 500 or more.

(3) No nomination shall be made in respect of a certificate applied for and held by or on behalf of a minor.

(4) A nomination made by the holder or holders of a certificate under this rule may be cancelled or varied by submitting an application in Form 3 affixing postage stamps of the value specified in sub-rule (2) of rule 29 together with the certificate to the Postmaster of the post office at which the certificate stands registered.

(5) Separate applications for nomination or cancellation of a nomination or variation of a nomination shall be made in respect of certificates registered on different dates.

(6) The nomination or the cancellation of a nomination or the variation of a nomination shall be effective from the date it is registered in the post office, which date shall be noted on the certificate.

19. Encashment on maturity and payment of interest - (1) The maturity period of a certificate of any denomination shall be six years commencing from the date of the certificate.  A certificate shall be encashable at par at any time after the expiry of its maturity period.

(2) Interest on a certificate of any denomination shall be payable at the end of every six months from the date of the certificate, but not beyond the maturity period, for which the certificate is held.  Such interest shall be calculated at the rate of 12 per cent per annum on the face value of the certificate.

Note : The interest for each six monthly period can be claimed at any time after the expiry of that period and where for any reason such interest having become due has not been claimed, no additional interest on that ground shall be payable under any circumstances:

Provided that where a certificate has been purchased on or after the 1st March, 1983, by or on behalf of an individual specified in the proviso to rule 8 and payment therefor has been made in any of the modes specified in the said proviso, the interest payable under this sub-rule shall be calculated at the rate of 13 per cent per annum on the face value of the certificate.

1[(3) Where a certificate of any denomination has been purchased on or after the 1st day of April, 1987, the interest on such certificate shall be payable at the end of every six months from the date of the certificate but not beyond the maturity period for which the certificate is held.  Such interest shall be calculated at the rate of 11 per cent per annum of the face value of the certificate.]

20. Premature encashment - (1) Notwithstanding anything contained in rule 19 and subject to sub-rules (2) and (3), a certificate purchased on or after the 1st day of April, 1986, may be prematurely encashed in any of the following circumstances, namely :—

(a)  on the death of the holder or both the holders in case of joint holders;

(b)  on forfeiture by a pledgee being a Gazetted Government Officer, when a pledge is in conformity with the provisions of these rules;

  (c)  when ordered by a court of law.

(2) If a certificate is encashed under sub-rule (1), the face value of the certificate shall be payable after deducting therefrom discount as specified below :—

(i)

If the certificate is encashed before the expiry of one year from the date of the certificate

discount equivalent to the interest paid or payable under sub-rule 2 of rule 19.

(ii)

If the certificate is encashed after the expiry of one year but before the expiry of three years from the date of the certificate

discount equivalent to the difference between :

 

(a) the interest paid or payable under sub-rule 2 of rule 19; and

 

(b) simple interest calculated on the face value of the certificate, at the rate applicable from time to time to single accounts under the Post Office Savings Accounts Rules, 1981, for the complete months for which the certificate has been held.

1[(3)(a) If a certificate purchased on or after 1st day of April, 1986, but before the 1st day of April, 1987, is encashed under sub-rule (1) after expiry of three years from the date of the certificate, the amount payable after adjustment of discount, shall be as specified in the Table below :

TABLE

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

Amount payable on a certificate of Rs. 100 denomination

(Rs.)

(1)

(2)

3 years or more, but less than 3 years and 6 months

91.55

3 years and 6 months or more, but less than 4 years

89.90

4 years or more, but less than 4 years and 6 months

88.15

4 years and 6 months or more, but less than 5 years

86.35

5 years or more, but less than 5 years and 6 months

84.45

5 years and 6 months or more, but less than 6 years

82.45

Note : The amount payable after adjustment of discount on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.

(b) If a certificate purchased on or after 1st day of April, 1987, is encashed under sub-rule (1) after expiry of three years from the date of the certificate, the amount payable after adjustment of discount shall be as specified in the Table below :—

TABLE

Amount payable after adjustment of discount on premature encashment of certificate purchased on or after 1st day of April, 1987

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

Amount payable on a certificate of Rs. 100 denomination

(Rs.)

(1)

(2)

3 years or more, but less than 3 years and 6 months

94.95

3 years and 6 months or more, but less than 4 years

93.95

4 years or more, but less than 4 years and 6 months

92.90

4 years and 6 months or more, but less than 5 years

91.80

5 years or more but less than 5 years and 6 months

90.70

5 years and 6 months or more, but less than 6 years

89.50

Note : The amount payable after adjustment of discount on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.

(4) Notwithstanding anything contained in sub-rule (3), where a certificate has been purchased on or after the 1st March, 1983, by or on behalf of an individual specified in the proviso to rule 8 and payment therefor has been made in any of the modes specified in the said proviso, the amount payable on encashment of such certificate after the expiry of three years from the date of the certificate, after adjustment of discount, shall be as specified in the Table below :—

TABLE

Amount payable after adjustment of discount on premature

encashment of a certificate

 

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

Amount payable on a certificate of Rs. 100 denomination(Rs.)

(1)

(2)

3 years or more, but less than 3 years and 6 months

88.15

3 years and 6 months or more, but less than 4 years

85.85

4 years or more, but less than 4 years and 6 months

83.45

4 years and 6 months or more, but less than 5 years

80.90

5 years or more, but less than 5 years and 6 months

78.25

5 years and 6 months or more, but less than 6 years

75.45

Note : The amount payable after adjustment of discount on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.

**

**

**

28. Income-tax - Interest on certificates specified in sub-rule (2) of rule 19 shall be liable to tax under the Income-tax Act, 1961 (43 of 1961), but no tax shall be deducted at the time of payment of interest :

Provided that such interest shall not, in the case of certificate purchased under rule 6 or rule 7 by or on behalf of a person who is a non-resident, be liable to tax subject to the fulfilment of the conditions specified in this behalf in the said Act.

28A. Wealth-tax - Subject to the conditions specified in this behalf in the Wealth-tax Act, 1957 (27 of 1957), wealth-tax shall not be payable in respect of certificates purchased under rule 6 or rule 7 by or on behalf of a person who is not resident in India.

28B. Gift-tax - Subject to the conditions specified in this behalf in the Gift-tax Act, 1958 (18 of 1958), gift-tax shall not be charged in respect of gifts made by a person who is not resident in India to any relative of such person in India in the form of certificate purchased by such person under rule 6 or on his behalf under rule 7.

29. Fees - (1) A fee of rupee one in the case of a certificate of the denomination of Rs. 500 or above and a fee of twenty-five paise in any other case shall be chargeable in respect of the following transactions, namely :—

  (i)  transfer of certificate from one person to another, other than a transfer from the holder to a court of law or under the orders of a court of law;

(ii)  issue of a duplicate certificate under rule 17;

(iii)  issue of a certificate of discharge under rule 22; and

(iv)  conversion from one denomination to another under rule 27:

Provided that no fee shall be chargeable in respect of such transactions in the case of a certificate purchased by a person who is a non-resident or, as the case may be, who is not resident in India.

Explanation 1 :  The fee to be charged for the issue of a certificate of discharge under clause (iii) shall be calculated separately on the aggregate face value of all certificates which were purchased on any one application and which are included for discharge certificate.

Explanation 2 : The fee to be charged for a conversion under clause (iv) shall be based on the number and denomination of the certificates required to be issued on such conversion.

(2) A fee of fifty paise shall be chargeable on every application for registration of nomination, or of any variation in nomination or cancellation thereof :

Provided that no fee shall be charged on an application for registration of the first nomination :

Provided further that no fee shall be charged in the case of a certificate purchased by a person who is a non-resident or, as the case may be, who is not resident in India.

30. Responsibility of the post office - The post office shall not be responsible for any loss caused to a holder by any person obtaining possession of a certificate and fraudulently encashing it.

31. Rectification of mistakes - The Director General, Posts and Telegraphs or the Postmaster-General or Heads of Postal Divisions in their respective jurisdiction, may either suo motu  or upon an application by any person interested in any certificate issued in pursuance of these rules, rectify any clerical or arithmetical mistakes with respect to that certificate, provided that it does not involve any financial loss to the Government or to any such person.

32. Power to relax - Where the Central Government is satisfied that the operation of any of the provisions of these rules causes undue hardship to the holder or holders of a certificate, it may, by order, for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.

1FORM 1

[See rules 6, 10 and 18(1)]

Form of application for purchase of National Savings

Certificates (VII Issue)

Serial No...................

To

The Postmaster ........................................................... Post Office ........................................................... I/We, hereby tender Rs. ............................................. (Rupees ................................................... only) in cash/by cheque No. ............................ for the purchase of National Savings Certificates (VII Issue), of the type Single/Joint A/Joint B/

(a)  in the name(s) of ................................................ and ..................................................

(b)  in case of minor, his date of birth ................................................ encashable by the minor’s parent/guardian Shri/Smt. ................................................

(c) in the name of ..................................................... (members, etc.) .................................... through ............................................................................. (society or company, etc.)

2. I/We nominate the person(s) named below who shall, on my/our death, receive payment :

 

Sl. No.

Name of nominee

Full address

Date of birth of minor nominee

1.

 

 

 

 

2.

 

 

 

 

3. I/We, hereby agree to abide by the National Savings Certificates (VII Issue) Rules, 1981.

4. The certificate/identity slip may be made over to my/our agent Authority No. ............... or messenger who presents this application.

5. Depositor’s instruction :—Please credit the interest to my/our Savings Account No. ...................

 

.........................................................................................

Signature/thumb impression of investor(s)

Date ................................................

Address .................................................

..................................................................

Signature and address of witness

to nomination

 

Date ...............................

...........................................................................................

Received the certificate(s) and identity slip

...........................................................................................

Signature of investor/messenger authorised agent

Delete whichever is not applicable.

Identity Slip

Specimen signature

To be completed by the post office

Serial Nos. of certificates

Issue price

Rs.

Date of payment of interest

Date of encashment

Initials of the Postmaster

Remarks like transfer, issue of duplicates, etc., with initials

 

 

 

 

 

 

 

 

 

 

 

TOTAL

 

 

 

 

 

 

Date............................

.....................................................

Signature of Postmaster

 

FORM 1A

[See rules 6 and 18(1)]

indian posts and telegraPHs department

Form of application for purchase of National Savings Certificates (VII Issue)

by non-resident or person who is not resident in India

Serial No. ..................

1. I/We, hereby apply for the purchase of National Savings Certificates (VII Issue), as detailed below :

Particulars of Certificates required

Denomination

(Rs.)

Number of certificates

Total face value

(Rs.)

Type i.e., joint ‘A’ or ‘B’ @

5,000

 

 

 

1,000

 

 

 

500

 

 

 

100

 

 

 

Total

 

 

 

@ To be filled only for joint holding.

Joint ‘A’ type certificate is payable to both holders jointly or to the survivor, joint ‘B’ type is payable to either or survivor.

*(a)  in my/our name(s) # .........................................

*(b)  on behalf of minor # .........................................

         Date of birth of minor .....................................

         @ Certificate to be made encashable by father/mother/either parent/legal guardian of the minor.

  *(c)  (**) in the name of.............................. through....................................................................................... [Name and address of bank branch]

*Strike out (a)/(b)/(c) if not applicable.

# Give in block capitals name(s) with aliases, if any, address and country of residence.

@Strike out any or all of the alternatives, if not required.

(**) For a scheduled bank on behalf of client having Non-Resident (External)/Foreign Currency (Non-Resident) Account with the bank.

*2. I/We tender herewith towards the purchase price of the certificate applied for :

*(a)  Cheque No. .............................. dated ............................... in favour of the Postmaster .............................................................. [Name of Post Office] for Rs. ...................drawn on my/our Non-Resident (External) Account No. ........................... with ......................................... [Name and address of bank branch in India]

 

*(b)  †Demand draft/pay order No. ............................ dated .................... for Rs. ........................... in favour of the Postmaster.................................................................................................................. [Name of Post Office] for Rs. .................................................................... (Rupees.............................................................) issued by....................................................................... [Name and address of bank branch in India] by debit to Non-Resident (External) Account No. .................................................. [Name and address of bank branch in India] or by withdrawal of equivalent funds from Foreign Currency (Non-Resident) Account No. of............................................................. [Name and address of applicant(s)]together with a certificate from the said bank confirming that the draft/pay order has been issued by debit to or withdrawal from the account referred to above.

  *(c)  Demand draft No. ........................................ dated......................................... in favour of the Postmaster....................................................... [Name of Post Office] for** ...........................................................drawn by............................................................................................................... [Name and address of bank in country outside India] on......................................................................... [Name and address of its branch or corresponding bank in India]

 

*(d)  A sum of Rs. ..................................... (Rupees....................................) in cash together with foreign inward remittance certificate /bank certificate indicating conversion of foreign exchange in rupees/bank certificate indicating that the funds have emanated from my/our Non-Resident (External)/Foreign Currency (Non-Resident) Account No. ........................................................................................................................................ issued in my/our favour by................................................................................................................. [Name and address of the bank concerned]

*Fill up (a)/(b)/(c)/(d), as the case may be and delete the rest.

†For applicant(s) or for a scheduled bank or on behalf of a client applicant(s).

**Amount in Indian or foreign currency, as the case may be, in words and figures.

3. I/We agree that—

†(a) in a case where the Post Office requires a bank certificate showing the source of funds of which the certificates are to be purchased, the certificates will be issued to me/us only on receipt of such bank certificate by the Post Office;

‡(b) in case the proceeds of the cheque/demand draft are less than the face value of certificate(s) applied for, certificate(s) may be issued for the maximum possible total face value within such proceeds;

#(c)  in case such proceeds are more than the face value of certificate(s) applied for, certificate(s) may be issued as applied for; and

       #in either case, any balance amount of the proceeds may be refunded to ...................................................................................... [Name and address of person] who is hereby authorised by me/us to receive the same; or

(d)  credited to my Savings Account No. ........................................................................................... in post office savings bank........................................................................................................................ [Name of Post Office]

†Applicable where the required bank certificate is not submitted with the application.

‡Applicable only for cheque/draft expressed in foreign currency.

#Delete (c) or (d), as the case may be.

4. $I/We declare that *I am/we are citizen(s) of India/person(s) of Indian origin.

Note : A person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.

5. $I/We agree to abide by the National Savings Certificates (VII Issue) Rules, 1981.

6. $I/We do/do not require identity slip.

Note : No identity slip shall be issued to a person other than the one authorised, vide paragraph 1(b) above in case of purchase on behalf of a minor.

...........................................................

..................................................................

Signature

Signature

[not thumb impression of the person(s) authorised, if any, as per paragraph 1(b) above]

[or thumb impression, if illiterate, of applicant(s)]$$

Date..................................

Date.....................................

Address...........................

Address..............................

$The certificate(s) and the identity slip may be made over to Shri/Smt. .................................. Agent (Authority No. ..................) or messenger who presents his application.

..............................................................

*Signature

(or thumb impression, if

illiterate, of investor(s)

Date.......................................................

$ Strike out portions not applicable.

$$If the applicant is illiterate, his father’s name may also be given.

*To be signed or thumb impression affixed only when the investor does not take delivery of certificates personally.

7. Received the certificate(s) detailed above $ and identity slip.

............................................................

.............................................................................

@ Marks of identification of applicant(s)

Signature or thumb impression of purchaser or his agent/messenger (in case of authorised agent his Authority No. should be given)

 

.............................................................................

 

@Specimen signature(s) of

 

applicant(s)

$ Cross out, if the identity slip is not required.

@ To be furnished if identity slip is required under paragraph 6 and if the application is submitted through an agent, messenger or scheduled bank.

8. *Under provisions of section 6(1) of the Government Savings Certificates Act, 1959, I/we, ......................., the holder(s) of Savings Certificate(s) mentioned in this application, hereby nominate the person(s) mentioned below who shall, on my/our death, become entitled to the Savings Certificate(s) and the amount due thereon to the exclusion of all other persons :

Sl. No.

Name(s) of the nominee(s)

Full Address

Date of birth of nominee, if minor

 

 

 

 

 

 

 

 

*Strike out portions not applicable.

As the nominee(s) at Serial No.(s)................................... above is/are minor(s), I/we appoint Shri/Smt. Kumari............................................................................................................................................. [Name and full address] as the person to receive the amount due thereon in the event of my/our death during the minority of the nominee(s).

................................................…

............................................................

Signature and full address of witness

Signature

 

[or thumb impression, if illiterate of holder(s)]

 

TO BE COMPLETED BY THE POST OFFICE

Sl. No. of certificate issued

Issue price

Rs.

Date of payment of interest

Date of encashment and initials of Postmaster

Remarks like transfer, issue of duplicate, etc., and initials of Postmaster

 

 

 

 

 

 

 

 

 

Total number of National Savings Certificates (VII Issue)

*Amount realised Rs..............................................................................

Certificate(s) issued for Rs. ...............................................................

Amount refunded as per paragraph 3(b) Rs...............................

Date........................................... 19......

..........................................................

 

Signature of Postmaster

*In case of investment by cheque/demand draft in foreign currency.

Annex III : National Savings Certificates
(VIII Issue)* Rules, 1989

In exercise of the powers conferred by section 12 of the Govern­ment Savings Certificates Act, 1959 (46 of 1959), the Central Government hereby makes the following rules, namely :—

Short title and commencement.

1. (1) These rules may be called the National Savings Certifi­cates (VIII Issue) Rules, 1989.

(2) They shall come into force on the 8th May, 1989.

Definitions.

2. In these rules, unless the context otherwise requires,—

  (i)  “Act” means the Government Savings Certificates Act, 1959 (46 of 1959);

(ii)  [***]

(iii)  “cash” means cash in Indian currency;

(iv)  “certificate” means the National Savings Certificates (VIII Issue);

(v)  [***]

(vi)  “corporation” means a corporation established by or under any law for the time being in force;

(vii) [***]

(viii) “form” means a form appended to these rules and also includes forms as prescribed by the Department of Posts;

(ix)  “Government Company” means a Company as defined in section 617 of the Companies Act, 1956 (1 of 1956);

  (x)  “local authority” means a municipal corporation, munic­ipal committee, district board, Body of Port Commissioners or other authority legally entitled to or entrusted by the  Govern­ment with the control or management of municipal or local fund;

(xi)  “old certificate” means a certificate issued under the Post Office Savings Certificates Rules, 1960, or the National Savings Certificates (First Issue) Rules, 1965, or the National Savings Certificates (IV Issue) Rules, 1970, or the National Savings Certificates (V Issue) Rules, 1973 or a bond issued under the National Development Bonds Rules, 1977, or the National Savings Certificates (VI Issue) Rules, 1981, or the National Savings Certificates (VII Issue) Rules, 1981, or the Social Security Certificates Rules, 1982, or the Kisan Vikas Patra Rules, 1988;

(xii) “Post office” means any departmental post office in India doing savings bank work and such other post office as is authorised by the Department of Posts;

(xiii) “Scheduled bank” means a bank for the time being included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);

(xiv) “trust” means a trust registered under any law for the time being in force.

Denominations in which certificates shall be issued.

3. The National Savings Certificates (VIII Issue) shall be issued in denominations of Rs. 100, Rs. 500, Rs. 1,000,  Rs. 5,000, Rs. 10,000 and such other denominations as may be notified by the Central Government from time to time.

Types of certificates and issue thereof.

4. (1) The certificates shall be of the following types, namely:—

(a)  Single holder type certificates;

(b)  Joint ‘A’ type certificates; and

  (c)  Joint ‘B’ type certificates.

(2) 1[(a) A single holder type certificate may be issued to:—

  (i)  an adult for himself or on behalf of a minor or to a minor;

(ii)  a trust;]

2[(iii) a Hindu undivided family;]

(b) A joint ‘A’  type certificate may be issued jointly to two adults payable to both the holders jointly or to the survi­vor;

(c) A joint ‘B’ type certificate may be issued jointly to two adults payable to either of the holders or to the survivor.

Purchase of Certificates.

5. Certificates may be purchased for any amount.

Procedure for purchase of certificates.

6. Any person or body specified in rule 4, desiring to purchase a certificate, shall present at a post office an application in Form 1, either in person or through an authorised agent of the small savings schemes.

Legal tender.

7. Payment for the purchase of a certificate may be made to a post office in any of the following modes, namely:—

  (i)  cash;

(ii)  a locally executed cheque, pay order or demand draft drawn in favour of the postmaster;

(iii)  by presenting a duly signed withdrawal form together with the pass book for withdrawal from the post office savings bank account;

(iv)  surrender of a matured old certificate duly discharged as follows:—

       “Received payment through issue of fresh certificate, vide appli­cation attached.”

Issue of certificates.

8. (1) On payment being made under rule 7, except where payment is made by a cheque, pay order or demand draft, a certificate shall normally be issued immediately, and the date of such cer­tificate shall be the date of payment.

(2) Where payment for the purchase of the certificate is made by a cheque, pay order or demand draft, the certificate shall not be issued before the proceeds of the cheque, pay order or demand draft, as the case may be, are realised and the date of such certificate shall be the date of encashment of the cheque, pay order or demand draft, as the case may be.

(3) If for any reason a certificate cannot be issued immediately, a provisional receipt shall be given to the purchaser which may later be exchanged for a certificate and the date of such certificate shall be as specified in sub-rule (1) or sub-rule (2), as the case may be.

Certificate in lieu of proceeds of old certificate.

9. A holder of an old certificate entitled to encash that certif­icate may make an application in Form 1 for the grant of a cer­tificate under these rules; on receipt of such an application, there shall be issued to the applicant a certificate under these rules, the date of issue being the date on which the old certifi­cate duly discharged is presented.

Transfer from one post office to another.

10. (1) A certificate may be transferred from a post office at which it stands registered, to any other post office on the holder or holders making an application in the prescribed form, at either of the two post offices.

(2) Every such application shall be signed by the holder or hold­ers of the certificate:

Provided that in the case of joint ‘A’ type certificate or a joint ‘B’ type certificate, the application may be signed by one of the joint holders if the other is dead.

Transfer of certificate from one person to another.

11. (1) A certificate may be transferred with the previous con­sent in writing of an officer of the post office as specified below (hereinafter referred to in these rules as authorised post­master) :

Cases in which transfer can be sanctioned

Designation of the officer competent to grant permission for transfer

(a)

(i) From the name of a deceased holder to his heir.

 

 

(ii) From a holder to a court of law or to any other person under the orders of a court of law.

 

 

(iii) From a single holder to the names of joint holders of whom the transferee shall be one.

Postmaster of the post office where the certificate stands registered.

 

(iv) From joint holders to the name of one of the joint holders.

 

(b)

All other cases

Head Postmaster.

(2) An authorised postmaster as referred in sub-rule (1) shall give his consent to the transfer of a certificate only if the following conditions are satisfied, namely:—

(a)  the transferee is eligible under these rules to pur­chase certificates;

(b)  the transfer is made after the expiry of a period of at least one year from the date of the certificate or where the transfer is sought before the expiry of such period, the transfer falls under any of the following categories, namely:—

  (i)  transfer to a near relative out of natural love and affection;

       Explanation : For the purpose of this rule, “near relative” means husband, wife, lineal ascendant or descendant, brother or sister;

(ii)  transfer in the name of the heir of the deceased hold­er;

(iii)  transfer from a holder to a court of law or to any other person under the orders of a court of law;

(iv)  transfer in accordance with rule 12;

(v)  transfer in the name of the survivor in  the event of death of one of the joint holders;

  (c)  an application for transfer is made in the prescribed form and is signed by the holder or holders of the certificate:

Provided that in the case of a joint ‘A’ type certificate or a joint ‘B’ type certificate, the application may be signed by one of the holders, if the other is dead.

(3) Without prejudice to the provisions of sub-rule (2), an authorised postmaster shall give his consent to the transfer of a certificate held on behalf of a minor only if at the time of the proposed transfer, a parent or the guardian referred to in sub-clause (i) or, as the case may be, sub-clause (ii) of clause (b) of section 5 of the Act, certifies in writing that the minor is alive and that such transfer is in his interest.

(4) In every case of transfer, other than a transfer under rule 12, the original certificate shall be duly discharged and the new certificate bearing the same date as that of the original certif­icate surrendered shall be issued in the name of the transferee.

Pledging of certificate.

12. (1) On an application being made in the prescribed form, by the transferor and the transferee, the Postmaster of the office of registration may at any time, permit the transfer of any certificate as security to,—

(a)  the President of India or Governor of a State in his official capacity;

(b)  the Reserve Bank of India or a scheduled bank or a co-operative society including a co-operative bank;

  (c)  a corporation or a  Government company; 3[***]

4[(d) a local authority; and

  (e)  a housing finance company approved by the National Housing Bank and 5notified by the Central Government]:

Provided that the transfer of a certificate purchased on behalf of a minor shall not be permitted under this sub-rule unless the parent or the guardian of the minor referred to in sub-clause (i) or, as the case may be, sub-clause (ii) of clause (b) of section 5 of the Act certifies in writing that the minor is alive and that the transfer is for the benefit of the minor.

(2) When any certificate is transferred as security under sub-rule (1), the postmaster of the office of registration shall make the following endorsement on the certificate, namely:—

“Transferred as security to............................”

(3) Except as otherwise provided in these rules, the transferee of a certificate under this rule shall, until it is re-transferred under sub-rule (4), be deemed to be the holder of the certificate.

(4) A certificate transferred under sub-rule (2) may, on the written authority of the pledgee, be re-transferred with the previous sanction in writing of the authorised postmaster and when any such re-transfer is made, the postmaster of the office of registration shall make the following endorsement on the certifi­cate, namely:—

“Re-transferred to.....”

Note 1: A Gazetted Officer of the  Government  accepting the certificate as security under sub-rule (1) or releasing the pledge under sub-rule (4) on behalf of the President or the Governor of a State, shall certify under his dated signature and seal of office that he is duly authorised to execute such instru­ments or deeds on behalf of the President of India or Governor of a State, giving the particulars of the number and date of the notification of the Government authorising him in this behalf.

Note 2 : An officer of the Reserve Bank of India or a scheduled bank or a co-operative society including a co-operative bank, a corporation or a Government company or a local authority, as the case may be, accepting the certificate as security under sub-rule (1) or releasing the pledge under sub-rule (4) on behalf of the respective institution, shall certify under his dated signature and seal of office that he is duly authorised under the articles of the said institution, to execute such instruments or deeds on its behalf.

(5) Where as a result of several endorsements made under sub-rules (2) and (4) on a certificate, no space is left for making further endorsements of a like character on that certificate, a fresh certificate may be issued by the postmaster of the office of registration in lieu of such certificate.

(6) A fresh certificate issued under sub-rule (5) shall be treat­ed as equivalent to the certificate in lieu of which it has been issued for all purposes of these rules.

Replacement of lost or destroyed certificate.

13. (1) If a certificate is lost, stolen, destroyed, mutilated or defaced, the person entitled thereto may apply for the issue of a duplicate certificate to the post office where the certificate is registered or to any other post office in which case the applica­tion will be forwarded to the post office of registration.

(2) Every such application shall be accompanied by a statement showing particulars, such as number, amount and date of the certificate and the circumstance attending such loss, theft, destruction, mutilation or defacement.

(3) If the officer-in-charge of the post office of registration is satisfied of the loss, theft, destruction, mutilation or defacement of the certificate, he shall issue a duplicate certif­icate on the applicant furnishing an indemnity bond in the pre­s-cribed form with one or more approved sureties or with a bank guarantee :

Provided that where the face value or the aggregate face value of the certificate or certificates lost, stolen, destroyed, mutilat­ed or defaced is Rs. 500 or less, a duplicate certificate or certificates may be issued on the applicant furnishing an indem­nity bond without any such surety or guarantee :

Provided further that where such application is made with respect to a certificate mutilated or defaced, of whatever face value, a duplicate certificate may be issued without any such indemnity bond, surety or guarantee, if the certificate mutilated or de­faced is surrendered and the certificate is capable of being identified as the one originally issued.

(4) A duplicate certificate issued under sub-rule (3) shall be treated as equivalent to the original certificate for all the purposes of these rules except that it shall not be encashable at a post office other than the post office at which such certifi­cate is registered without previous verification.

Nomination.

14. (1) Subject to the provisions of sub-rules (2) to (6), the single holder or joint holders of a certificate may, by filling in necessary particulars on Form 1 at the time of purchasing the certificate, nominate any person who, in the event of death of the single holder or both the joint holders, as the case may be, shall become entitled to the certificate and to the payment of the amount due thereon. If such nomination is not made at the time of purchasing the certificate, it may be made by the single holder, the joint holders or the surviving joint holder, as the case may be, at any time after the purchase of the certificate but before its maturity, by means of an application in Form 2 to the post­master of the office at which the certificate stands registered.

(2) There shall not be more than one nominee, except in cases where the denomination of a certificate is Rs. 500 or more.

(3) No nomination shall be made in respect of a certificate applied for and held by or on behalf of a minor.

(4) A nomination made by the holder or holders of a certificate under this rule may be cancelled or varied by submitting an application in Form 3 affixing postage stamps of the value speci­fied in sub-rule (2) of rule 25 together with the certificate to the postmaster of the post office at which the certificate stands registered.

(5) Separate application for nomination or cancellation of a nomination or variation of a nomination shall be made in respect of certificates registered on different dates.

(6) The nomination or the cancellation of a nomination or the variation of a nomination shall be effective from the date it is registered in the post office, which shall be noted on the cer­tificate.

Encashment on maturity.

15. 6[(1)] The maturity period of a certificate of any denomination shall be six years commencing from the date of the certificate. The amount, inclusive of interest, payable on encashment of a certificate at any time after the expiry of its maturity period, shall be Rs. 201.50 for denomination of Rs. 100 and at propor­tionate rate for any other denomination. The interest as speci­fied in the Table below shall accrue to the holder or holders of the certificate at the end of each year and the interest so ac­crued at the end of each year up to the end of the fifth year, shall be deemed to have been re-invested on behalf of the holder and aggregated with the amount of face value of the certificate.

Table

The year for which interest accrues

Amount of interest (Rs.) accruing on certificate of Rs. 100 denomination

First year

12.40

Second year

13.90

Third year

15.60

Fourth year

17.50

Fifth year

19.70

Sixth year

22.40

Note : The amount of interest accruing on a certificate of any other denomination shall be proportionate to the amount specified in Table above.

6[(2) Where a certificate has been purchased on or after the 1st day of January, 1999 the amount, inclusive of interest, payable on encashment of the certificate at any time after the expiry of its maturity period shall be Rs. 195.60 for denomination of Rs. 100 and at proportionate rate for any other denomination. The inter­est as specified in the Table below shall accrue to the holder or holders of the certificate at the end of each year and the inter­est so accrued at the end of each year upto the end of the fifth year shall be deemed to have been reinvested on behalf of the holder and aggregated with the amount of face value of the cer­tificate.

Table

The year for which interest accrues

Amount of interest accruing on certificate of Rs. 100 denomination

(Rupees)

First year

11.83

Second year

13.23

Third year

14.80

Fourth year

16.54

Fifth year

18.51

Sixth year

20.69

Note : The amount of interest accruing on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.]

7[(3) Where a certificate has been purchased on or after the 15th day of January, 2000, 8[but before the 1st day of March, 2001] the amount inclusive of interest, payable on encashment of the certificate at any time after the expiry of its maturity period shall be Rs. 190.12 for denomination of Rs. 100 and at proportionate rate for any other denomination. The interest as specified in the Table below shall accrue to the holder or holders of the certificate at the end of each year and the interest so accrued at the end of each year upto the end of the fifth year shall be deemed to have been reinvested on behalf of the holder and aggregated with the amount of face value of the certificate.

Table

The year for which interest accrues

Amount of interest accruing on certificate of Rs. 100 denomination

(Rupees)

First year

11.30

Second year

12.58

Third year

14.00

Fourth year

15.58

Fifth year

17.35

Sixth year

19.31

Note : The amount of interest accruing on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.]

8[(4) Where a certificate has been purchased on or after the 1st day of March, 2001, the amount inclusive of interest, payable on encashment of the certificate at any time after the expiry of its maturity period shall be Rs. 174.52 for denomination of Rs. 100 and at proportionate rate for any other denomination. The inter­est as specified in the Table below shall accrue to the holder or holders of the certificate at the end of each year and the inter­est so accrued at the end of each year upto the end of the fifth year shall be deemed to have been reinvested on behalf of the holder and aggregated with the amount of face value of the cer­tificate.

Table

The year for which interest accrues

Amount of interest (Rs.) accruing on certificate of Rs. 100 denomination

First year

9.72

Second year

10.67

Third year

11.71

Fourth year

12.85

Fifth year

14.10

Sixth year

15.47

Note : The amount of interest accruing on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.]

Premature encashment.

16. (1) Notwithstanding anything contained in rule 15 and subject to sub-rules (2), (3) and (4), a certificate may be prematurely encashed in any of the following circumstances, namely :—

(a)  on the death of the holder or any of the holders in case of joint holders;

(b)  on forfeiture by a pledgee being a Gazetted Government Officer when the pledge is in conformity with these rules ; or

  (c)  when ordered by a court of law.

(2) If a certificate is encashed under sub-rule (1) within a period of one year from the date of the certificate, only the face value of the certificate shall be payable.

(3) If a certificate is encashed under sub-rule (1) after expiry of one year but before the expiry of three years from the date of certificate, the encashment shall be at a discount. On encashment of the certificate, an amount equivalent to the face value of the certificate together with simple interest shall be payable. Such simple interest shall be calculated on the face value at the rate applicable from time to time to single accounts under the Post Office Savings Account Rules, 1981, for the  complete months for which the certificate has been held. The difference between the aforesaid simple interest and the interest accruing under rule 15 shall be deemed to be the discount.

9[(4) (i) If a certificate is encashed under sub-rule (1) after the expiry of three years from the date of certificate purchased before the 1st day of March, 2001, the amount payable, inclusive of interest accrued under rule 15 and after adjustment of dis­count, shall be as specified in the Table below for a certificate of Rs. 100 denomination and at a proportionate rate for a certif­icate of any other denomination.

Table

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

Amount payable inclusive of interest (Rupees)

Three years or more, but less than three years and six months

132.00

Three years and six months or more, but less than four years

138.50

Four years or more, but less than four years and six months

145.00

Four years and six months or more, but less than five years

152.00

Five years or more, but less than five years and six months

159.00

Five years and six months or more, but less than six years

166.50;

(ii) If a certificate is encashed under sub-rule (1) after the expiry of three years from the date of certificate purchased on or after the 1st day of March, 2001, the amount payable, inclu­sive of interest accrued under rule 15 and after adjustment of discount, shall be as specified in the Table below for a certifi­cate of Rs. 100 denomination and at a proportionate rate for a certificate of any other denomination.

Table

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

Amount payable inclusive of interest (Rupees)

Three years or more, but less than three years and six months

126.43

Three years and six months or more, but less than four years

131.71

Four years or more, but less than four years and six months

136.90

Four years and six months or more, but less than five years

142.48

Five years or more, but less than five years and six months

147.98

Five years and six months or more, but less than six years

153.89.]

Place of encashment.

17. A certificate shall be encashable at the post office at which it stands registered:

Provided that a certificate may be encashed at any other post office if the officer-in-charge of that post office is satisfied on verification from the office of its registration that the person presenting the certificate for encashment is entitled thereto.

Discharge of certificate.

18. (1) The person entitled to receive the amount due under a certificate shall, on its encashment, sign on the back thereof in token of having received the payment.

(2) In the case of a certificate purchased on behalf of a minor who has since attained majority, the certificate shall be signed by such a person himself, but his signature shall be attested by the person who purchased it on his behalf or by any other person who is known to the postmaster.

(3) A certificate of discharge may be issued by the post office to any person encashing a certificate on payment of the fee specified in sub-rule (1) of rule 25.

Encashment of minor’s certificate.

19. (1) A person encashing a certificate on behalf of a minor shall furnish a letter from the parent or guardian of the minor referred to in sub-clause (i) or, as the case may be, sub-clause (ii) of clause (b) of section 5 of the Act, to the effect that the minor is alive and that the money is required on behalf of the minor.

(2) When the nominee is a minor, the person appointed under sub-section (3) of section 6 of the Act while encashing the certifi­cate, shall furnish a certificate that the minor is alive and that the money is required on behalf of the minor.

Payment to heirs.

20. (1) If a person dies and is at the time of his death the holder of a savings certificate and there is no nomination in force at the time of his death and probate of his will or letters of administration of his estate or a succession certificate granted under the Indian Succession Act, 1925 (39 of 1925), is not, within three months of the death of the holder, produced to the authority specified in the Table to sub-rule (2), then if the sum due on the savings certificate does not exceed 10[Rs. 60,000] (inclusive of the sum due on the savings certificates issued from time to time and held by the deceased), the authority specified in the Table to sub-rule (2) may pay the same to any person appearing to it to be entitled to receive the sum or to adminis­ter the estate of the deceased.

(2) The authorities specified in the Table below shall be compe­tent to sanction claims up to the limit noted against each on the death of the holder of the savings certificate without production of the probate of his will or letters of administration of his estate or succession certificate granted under the Indian Succes­sion Act, 1925 (39 of 1925).

11[TABLE

Name of the authority

Limit (in Rs.)

(i)Departmental Sub-Postmasters in Time Scale Post Offices

500 

(ii)Sub-Postmasters of Lower Selection Grade Post Offices

1,000 

(iii)Sub-Postmasters/Deputy Postmasters/Postmasters  in Higher Selection Grade (all non-Gazetted)

2,000 

(iv)Deputy   Postmasters/Senior  Postmasters/Deputy Chief Postmasters/Superintendent of Post Offices/Deputy Superintendent of Post Offices (all Gazetted Group-B)

10,000 

(v)Chief  Postmasters  in  Head  Offices,  Senior  Superintendents of Post Offices (all Group-A)

25,000 

(vi)Regional  Director/Director  (General  Post  Offices)  (in Mumbai and Calcutta)

40,000 

(vii)Chief Postmasters General/Postmasters General (Head Quarter and Region)

60,000.]

 

Encashment of certificates held by Army, Air Force and Navy Personnel.

21. Where a certificate is held by a person who is subject to the Army Act, 1950 (46 of 1950), or the Air Force Act, 1950 (45 of 1950), or the Navy Act, 1957 (62 of 1957), and such person dies or deserts, the Commanding Officer of the Corps, department, unit or ship to which the deceased or deserter belonged or the Committee of Adjustment, as the case may be, may send a requisi­tion to the officer-in-charge of the post office where the cer­tificate stands registered to pay him or it, the amount due under the certificate, and the officer-in-charge of the post office shall be bound to comply with such requisition even though there is in force at the time of death or desertion of holder of the certificate a nomination made in favour of any person.

Explanation : The aforesaid requisition must be made under sec­tion 3 or section 4 of the Army and Air Force (Disposal of Pri­vate Property) Act, 1950 (40 of 1950), in the case of a person belonging to the Army or the Air Force, or under section 171 or 172 of the Navy Act, 1957 (62 of 1957), in the case of a person belonging to the Navy.

Rights of nominees.

22. (1) In the event of the death of the holder of a certificate in respect of which a nomination is in force, the nominee or nominees shall be entitled at any time before or after the matu­rity of the certificate to :

(a)  encash the certificate; or

(b)  sub-divide the certificate in appropriate denominations in favour of individual nominees or two adult nominees jointly.

(2) For the purpose of sub-rule (1), the surviving nominee or nominees shall make an application to the postmaster of the office of registration, supported by proof of death of the holder and of deceased nominee or nominees, if any.

(3) If there are more nominees than one, all the nominees shall give a joint discharge of the certificate at the time of receiv­ing the payment or sub-division.

Note : When there is a nomination in favour of a single nominee or two adult nominees, the post office of registration may, on an application made in that behalf, issue a fresh certificate in the name of such nominee or nominees jointly, as the case may be.

Conversion from one denomination to another.

23. (1) Certificates of lower denomination may be exchanged for a certificate or certificates of higher denominations of the same aggregate face value or a certificate of higher denomination may be exchanged for the certificates of lower denomination of the same aggregate face value :

Provided that certificates bearing different dates shall not be combined for being exchanged for certificate or certificates of higher denomination.

(2) The date of the certificate or certificates issued in exchange shall be the same as that of the original certificate or certificates surrendered and not the date on which the exchange is made.

Income-tax.

24. Interest on these certificates shall be liable to tax under the Income-tax Act, 1961 (43 of 1961), on the basis of the annual accrual specified in rule 15, but no tax shall be deducted at the time of payment of discharge value.

Fees.

25. (1) A fee of rupees five shall be chargeable in respect of the following transactions, namely :—

  (i)  transfer of certificate from one person to another other than a transfer from the holder to a court of law or under the orders of a court of law;

(ii)  issue of duplicate certificate under rule 13;

(iii)  issue of a certificate of discharge under rule 18;

(iv)  conversion from one denomination to another under rule 23.

Explanation : The fee to be charged for conversion under clause (iv) shall be based on the number of the certificates required to be issued on such conversion.

(2) A fee of rupees five shall be chargeable on every application for registration of nomination or of any variation in nomination or cancellation thereof :

Provided that no fee shall be charged on an application for registration of the first nomination.

Responsibility of the post office.

26. The post office shall not be responsible for any loss caused to a holder by any person obtaining possession of a certificate and fraudulently encashing it.

Rectification of mistakes.

27. The Department of Posts, or the Postmasters-General or the Heads of Postal Divisions in their respective jurisdictions, may either suo motu or upon an application by any  person interested in any certificates issued in pursuance of these rules, rectify any clerical or arithmetical mistakes, with respect to that certificate, provided that it does not involve any financial loss to the Government or to any such person.

Power to relax.

28. Where the Central Government is satisfied that the operation of any of the provisions of these rules causes undue hardship to the holder or holders of a certificate, it may, by order, for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.

FORM 1

[See rule 6]

Form of application for purchase of National Savings Certificates (VIII Issue)

Serial No. .............................

To

The Postmaster,

.......................................

.......................................

I/We hereby tender Rs..................……………….......... (Rupees............................................................................ ........................................................................................................................................... only) in cash/by cheque No. ................................................................................ for purchase of National Savings Certificates (VIII Issue) of the type single/joint A/joint B.

       (a)  in the name(s) of.......................................................... and...................................................

       (b)  in the case of minor, his date of birth........................................................... encashable by the minor’s parent/guardian Shri/Smt.........................................................

2. I/We nominate the person(s) named below who shall, on my/our death, receive payment.

Sl. No.

Name of nominee

Full address

Date of birth of minor nominee

 

 

 

 

 

3. I/We hereby agree to abide by National Savings Certificates (VIII Issue) Rules, 1989.

4. The certificates may be made over to my/our agent Shri/Smt................................... .................................................................................. Authority No............................................................... or messenger who present the application.

Signature and address of witness to nomination

Signature/thumb impres­sion of investor

 

Date..................................................................................

..........................................................................

Address..........................................................................

..............................................................................

...........................................................................................

 

Received the certificate(s)

Delete whichever is not applicable.

Signature of investor/messenger/authorised agent

 

Date..................................................................................

 

TO BE COMPLETED BY THE POST OFFICE

Sl. Nos. of certificates

Issue price Rs.

Date of encashment

Initials of the postmaster

Remarks like transfer, issue of duplicate, etc. with initials

 

Total

Date .................... Signature of Postmaster

Form 2

[See rule 14(1)]

DEPARTMENT OF POSTS

Serial No..............................

Form of application for nomination under section 6 of the
Govern­ment Savings Certificates Act, 1959

(This form will be filled in by the holder(s) and submitted with the
certificates to the Postmaster of the office where the
cer­tificates stand registered)

To

The Postmaster,

.......................................

.......................................

Under provisions of section 6(1) of the Government Savings Cer­tificates Act, 1959, I/we.................................................................................................................................... the holder(s) of savings certificates detailed below, hereby nominate the persons mentioned below, who shall, on my/our death, become entitled to the savings certificate(s) and to be paid the sum due thereon to the exclusion of all other persons. I/We hereby de­clare that I/we have not so far made any nomination in respect of these certificates.

Sl. No.

Name of the nominee(s)

Full address

Date of birth of nominee in case of minor

 

 

 

 

 

 

 

 

 

 

 

2. As the nominee(s) at serial number(s)..........................................................above is/are minor(s), I/we appoint Shri/Smt./Kumari..............................................................………………....................... (Name and full address) as the person to receive the sum due thereon in the event of my/our death during the minority of the nominee(s).

3. The certificates detailed below are enclosed.

 

Sl. Nos. of certificates

Denomination

Date of issue

Office of issue

 

 

 

 

 

 

 

 

 

 

Address :

Yours faithfully,

 

.......................................

...........................................................................

 

 

Signature (or thumb impression if illiterate) of holder(s)

 

 

(In case of illiterate holder father’s name should be given) :

Witnesses :

Name................................................................

Address (1) ...................................................

.............................................................................

.............................................................................

Name................................................................

Address (2) ...................................................

.............................................................................

.............................................................................

Note : In the case of illiterate holders, the witnesses shall be persons whose signatures are known to the post office.

Order of the Postmaster accepting the nomination.

Date stamp of  Signature of Head/Sub-Postmaster

post office.

Form 3

[See rule 14(4)]

DEPARTMENT OF POSTS

Serial No..............................

Form of application for cancellation or variation of nomination previously
made in respect of savings certificates under section 6 of the
Government Savings Certificates Act, 1959

(This form will be filled in by the holder(s) and submitted with the
certificates to the Postmaster of the office where
the cer­tificate stands registered)

To

The Postmaster,

.......................................

.......................................

  Space for postage stamps.

Under the provisions of section 6(1) of the Government Savings Certificates Act, 1959, I/we.......................................................................................................................... the holder(s) of savings certificates detailed below, hereby cancel the nomination previously made by me/us in respect of these certificates and registered in your office under No. ................. dated.....................

*In place of the cancelled nomination, I/we hereby nominate the person(s) mentioned below, who shall, on my/our death, become entitled to the savings certificate(s) and to be paid the sum due thereon to the exclusion of all other persons.

Sl. No.

Name of the nominee(s)

Full address

Date of birth of nominee in case of minor

 

 

 

 

 

 

 

 

 

 

* To be filled in case of variation only.

2. As the nominee(s) at serial number(s)................................................................. above is/are minor(s), I/we appoint Shri/Smt./Kumari..................................................................................... (Name and full address) as the person to receive the sum due thereon in the event of my/our death during the minority of the nominee(s).

3. The certificates detailed below are enclosed.

Sl. Nos. of certificates

Denomination

Date of issue

Office of issue

 

 

 

 

 

 

 

 

 

Address :

Yours faithfully,

.......................................

...........................................................................

 

Signature (or thumb impression if illiterate) of holder(s)

 

(In case of illiterate holder father’s name should be given) :

Witnesses :

Name.................................................................

Address (1) ...................................................

.............................................................................

.............................................................................

Name................................................................

Address (2) ...................................................

.............................................................................

.............................................................................

Note : In the case of illiterate holders, the witnesses shall be persons whose signatures are known to the post office.

Order of the Postmaster accepting the nomination

Date stamp of post office.

Signature of Head/Sub-Postmaster

 

 

Notification : No. GSR 496(E), dated 1-5-1989.

504. Subscriptions to National Savings Certificates (VI Issue/VII Issue)  - Clarifications on certain issues regarding their eligibility for deduction under the section

1. Under section 80C(2)(h), an individual or Hindu undivided family or an association of persons or a body of individuals consisting only of husband and wife governed by the system of community of property in force in the Union territories of Dadra and Nagar Haveli and Goa, Daman and Diu is entitled to a deduction in respect of any sums paid in a previous year out of his or its income chargeable to tax, as subscription to any such security of the Central Government as may be specified in the Official Gazette.  National Savings Certificates (NSCs) VI and VII Issues have been specified as securities for the purposes of section 80C(2)(h) and the notification has come into force from April 2, 1983.

2. The following clarifications are issued in this connection :

(1) Whether income-tax exemption under section 8OC can be claimed by first named person in case of joint holding of NSCs VI Issue/VII Issue? The deduction under section 80C can be claimed by the person who has contributed the monies out of his income chargeable to tax.  It can be claimed by the first named person in a joint holding if the first named person has so contributed the amount.

(2) Whether rebate of income-tax under section 80C will be available where (a) NSCs VI Issue/VII Issue are purchased in the name of spouse and minor children, and (b) jointly by husband and wife ? - The answer to question (1) will apply also here.  The deduction under section 80C is to be given to the person who has purchased the NSCs out of his income chargeable to tax.

(3) Whether the interest accruing to the NSCs would be included in the hands of individual or in the case of person(s) in whose name(s) the subscription has been made? - The interest accruing on the subscription to the NSCs will be included in the hands of the person who has subscribed from his income chargeable to tax.

(4) Since the interest on 6-Year NSC VI Issue is deemed to have been re-invested whether the holder of the NSC-VI Issue is entitled to claim benefit of section 80C on this re-invested interest [Rules 19 and 28 of NSC-VI Issue Rules, 1981]?- The amount of interest re-invested will satisfy the test of having been paid out of income chargeable to tax to get the NSC and so will be entitled to deduction under section 80C.

(5) Whether a karta of a HUF can buy NSCs in the name of any member of the HUF ? - Where subscription to the NSCs in the name of any member of the HUF, is shown by the family to have been made out of its income chargeable to tax and the beneficial ownership in such certificates vests in the family, the family would be entitled to a deduction under section 80C with reference to such contribution.

(6) Whether the interest accrued on the subscription would be included in the hands of the individual or in the hands of the person in whose name the subscription has been made ? - The interest accrued would be included in the hands of the persons who purchased the NSC out of their income chargeable to tax.

Circular : No. 405 [F.  No. 178/1/84-IT(A-I)], dated 15-1-1985 as corrected by Circular : No. 418 [F. No. 178/1/84-IT(A-I)], dated 2-5-1985.

505. Deductions on Life Insurance premia, etc. - Notified Scheme under section 80C(2)(h)(ia)

In exercise of the powers conferred by sub-clause (ia) of clause (h) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the HOME LOAN ACCOUNT SCHEME of the National Housing Bank established under section 3 of the National Housing Bank Act, 1987 (53 of 1987) for the purposes of the said sub-clause for the assessment year 1990-91 and the subsequent assessment years.

Notification : No. SO 850(E), dated 25-10-1989.

506. Deductions on National Savings Certificates - Notified Savings Certificates under section 80C(2)(h)(ib)

In exercise of the powers conferred by sub-clause (ib) of clause (h) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the “National Savings Certificates (VIII Issue)” issued under the Government Savings Certificates Act, 1959, as saving certificates for the purposes of the said clause.

This notification shall come into force with effect from the 1st day of April, 1990.

Notification : No.  SO 270(E), dated 29-3-1990.