The Government has issued followed clarification regarding Senior Citizens Saving Scheme:
- An individual resident in Indian of sixty-five years of age or above may furnish a declaration in Form No. 15H to the bank/post office if the tax on his estimated income for the financial year is nil.
- A declaration in Form No. 15G can be furnished by a depositor of less than sixty-five years of age if-
- The tax on his estimated total income for the financial year is nil, and
- The aggregate amount of interest credited or paid or likely to be credited or paid during the during the financial year is not more than the maximum amount which is not chargeable to tax (Rs. 1, 00, 000 for male taxpayer and Rs. 1, 35, 000 for a woman taxpayer)
Note:Both the above conditions are required to be fulfilled. The information relating to deposits under the Senior Citizen Saving Scheme, 2004 may be given by the depositors inSchedule III of Form No. 15G
- On furnishing of a declaration in Form No.15H or Form No. 15G to the bank/post office, no deduction of tax shall be made by the bank/post office.
- In suitable cases a certificate for lower dedication or no deduction of tax at source under section 197 (1) may also be obtained by the depositors from their Assessing Officers.
Bank and post offices have been advised that such portion of the tax not deduction by them during 2004-05 and 2005-06, which has been paid directly by the depositors as advancetax or self-assessment tax or otherwise and for which necessary evidence is furnished by the depositors to the from the post office, will not be recovered by the Income-tax Department form the bank/post office. Similarly, to the extent of the amount for which declaration in Form Nos. 15H and 15G as well as certificate under section 197 (1) are available with the bank/post office, the department would not make recovery from the bank/post office.
The interest accruing on the deposits held under the Senior Citizen Saving Scheme, 2004 is taxable as per the provision of the Income-tax Act, 1961 and is also liable for Tax Deductionat Source (TDS) as per provisions of section 194A of the Act.
Clarifications has been sough form the Government as to whether declaration made by the depositors under SCSS in Form No. 15H and Form No. 15G of the Income-tax Rules may be accepted by the bank and post officers. Moreover, clarification had been sought on the recovery of TDS pertaining to financial year 2004-05 and 2005-06 in the current year. After examination of the issue the Government has issued the above clarification.