Even after submitting form 15G/15H for the current Financial Year, TDS has been deducted from SCSS account holders’ interest payments.

SB Order No. 37/2021

F. No. FS-13/7/2020-FS
Government of India
Ministry of Communications
Department of Posts
(Financial Services Division)

Dak Bhawan New Delhi-110001
Dated: 22.11.2021.

To,

All Head of Circles/Regions,

Subject: Deduction/ Non-deduction of TDS in SCSS accounts in post offices reg.

Sir/Madam,

Reference is invited to this office even letter no. dated 15.09.2021, in which the detailed guidelines were issued for configuration of TDS related parameters in Finacle in respect of SCSS accounts.

2. This office is receiving representations from the SCSS account holder(s) that TDS amount has been deducted from their interest payments even after submission of form 15G/15H for the current Financial Year.
3. I am directed to say that Circles should take necessary action for configuration of TDS/Form 15G/15H/NOPAN status in all SCSS accounts and CIFs.
4. The updated guidelines are again reiterated in respect of configuration of TDS/15G_15H/No PAN in respect of Senior Citizens Savings Scheme (SCSS) accounts in Finacle for necessary action: –

• Whenever the SCSS account holder submits form 15G/15H, the concerned post office shall ensure that the details in customers CIF and SCSS account as prescribed in the table below.
• All CBS post offices shall ensure that all form 15G/15H already received are updated in Finacle, as TDS deduction is based on the information available in CIF and Account level.
• CIF of SCSS account holders should be seeded with valid PAN.
• TDS code is configured in CIF level for SCSS account holders. It should be TDSNR/TDSNS only and not as NOTAX
• Tax liability will be calculated based on the age of customer and interest payable for the financial year
• Tax exemption is applicable only if the account is seeded with 15G/15H
• TDS code NOTAX/TDSNR will be converted as TDSNS on the date of customer reaching 60 years of age, by a batch process.
• If PAN is invalid, TDS code will be converted as NOPAN/NOPNS by the batch process in Finacle.
• Updating of form 15G/15H should be done on the date of receipt of form from the account holder.
• 15G/15H should be updated using CSCAM menu and verified without fail.
• Once 15G/15H is entered, tax category at account level will get updated to ‘No Tax’.

5. The following configuration should be made by all the CBS post offices for configuration of TDS or non-deduction of TDS or NO PAN in all existing SCSS accounts or at the time of opening of new account in SCSS as the case may be:-

6. Government of India has amended Section 194A of Income Tax Act, 1961 and accordingly the total aggregate interest income in a Financial Year payable in case of all SCSS account holders, who has not attained the age of 60 years has been revised and configured in Finacle from Rs. 10,000/- to Rs. 40,000/- for the purpose of TDS deduction.

7. Non-CBS post offices shall also deduct the TDS from the SCSS account holders aged below 60 years in accordance with the above revised limit.

8. It is the responsibility of concerned CBS post office for updation of form 15G/15H (if submitted) in every financial year and update correct PAN number. Quoting invalid PAN /wrong PAN number may attract penalty u/s 272B of Income Tax Act-1961.

9. It is requested to circulate these guidelines to all Post Offices for information, guidance and ensure necessary action.

10. This is issued with approval of the competent authority.

Yours Sincerely

(Devendra Sharma)
Assistant Director (SB-II)

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SB Order No. 19/2020

F. No. 113-02/2019-SB
Govt. of India
Ministry of Communications
Department of Posts
(Financial Services Division)

Dak Bhawan, New Delhi-110001
Dated: 26.05.2020

To,

All Head of Circles/Regions

Subject : Regarding extending the prescribed time limit of one month post retirement for retirees to invest in Sr. Citizen Savings Scheme (SCSS).

Madam / Sir,

The undersigned is directed to inform that vide O.M. No. 3/3/2019-NS (Pt.1) dated 21.05.2020, the MoF (DEA) has decided to relax some regulatory provisions to safeguard the interest of Small Savings Depositors in view of the lockdown in the country due to COVID-19 pandemic.

Also check: Guidelines for Tenure Transfer for the year 2020-21 to ensure economy in expenditure under TA/TP

2. Accordingly the following relaxation guidelines in reference to Sr. Citizen Savings Scheme (SCSS) are issued with immediate effect regarding :

• Individual retired (within the age bracket 55-60 years) on Superannuation or otherwise and got retirement benefits in February-2020, March-2020 and April-2020 are eligible to open SCSS account up to 30th June, 2020.
• Personnel from Defence Services retired and got retirement benefits in February-2020, March-2020 and April-2020 are also eligible to open SCSS account up to 30% June, 2020 under the prescribed eligibility conditions applicable to them.

3. It is requested to circulate it to all concerned for information and necessary action. The same may also be placed on the notice boards of the Post Offices in public area.

Also read: Compensation of Rs.10 lakhs to Postal Employees to cover death due to COVID-19

4. This issues with the approval of Competent Authority.

Yours Faithfully,

( Devendra Sharma )
Assistant Director (SB)

The post Extending the prescribed time limit of one month post retirement for retirees to invest in Sr. Citizen Savings Scheme appeared first on CENTRAL GOVERNMENT EMPLOYEES NEWS.

Interest rates on these post office saving schemes move in line with the government’s interest rates on small savings schemes.India Post or Department of Posts, which runs the postal network of the country, offers a number of saving schemes with income tax benefits. Using these saving schemes, investor can claim a deduction up to Rs. 1.5 lakh in a financial year from taxable income under Section 80C of the Income Tax Act. Interest rates on these post office saving schemes move in line with the government’s interest rates on small savings schemes, which are revised on a quarterly basis.

Here are post office saving schemes that offer tax benefits:

Post Office Time Deposit (TD) or Fixed Deposit (FD) account

In a post office fixed deposit (FD), one can deposit a lump sum of money for a specific period and avail of features like guaranteed returns and choice of interest payout. Post office time deposit (TD) or Fixed Deposit (FD) account offers interest rates across four maturities: one year, two years, three years, and five years, noted India Post on it’s official website- indiapost.gov.in. The investment under 5 years fixed deposit qualifies for the benefit of Section 80C of the Income Tax Act, 1961, mentioned India Post.

Post Office Public Provident Fund (PPF) account

Post office Public Provident Fund (PPF) account offers an investment avenue with decent returns coupled with income tax benefits. For the quarter ending December, PPF accounts fetch an interest rate of 8 per cent per annum. Interests on deposits are compounded on an annual basis, which means that it is added to the principal amount every year, noted India Post. PPF comes under the exempt, exempt, exempt (EEE) category of tax status. This means that returns, maturity amount and interest income are exempt from income tax. Deposits qualify for deduction from income under Section 80C of Income Tax Act.

Post Office Senior Citizen Savings Scheme (SCSS) account

Post Office Senior Citizen Savings Scheme (SCSS) serves as an investment avenue and helps in generating wealth for a successful retirement life. SCSS earns an interest rate of 8.7 per cent per annum, which is payable from the date of deposit on March 31/ September 30/December 31 in the first instance and thereafter, interest are payable on March 31, June 30, September 30 and December 31. Tax Deducted At Source (TDS) is deducted at source on interest if the interest amount is more than Rs. 10,000 per annum. Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from April 1, 2007.

Post office National Savings Certificates (NSCs)

Post Office National savings certificates (NSCs) fetch an interest rate of 8 per cent per annum. This interest is compounded annually but payable at maturity. An NSC of Rs. 100 will offer Rs. 146.93 on maturity after five years. NSCs have a lock-in period of five years. Deposits in the National Savings Certificate qualify for deduction under Section 80C of the Income Tax Act.

Source: NDTV

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