SB Order 06/2016 : Change in procedure of issue of NSC and KVP from 01.07.2016

Premature Closure of PPF Accounts

eposit scheme can be closed early for higher education, medical expense

NEW DELHI, JUNE 20: 

In a significant move, the Finance Ministry has allowed subscribers of the Public Provident Fund (PPF) to prematurely close their accounts after a minimum of five years for reasons such as higher education or expenditure towards medical treatment.

The Finance Ministry has also retained the interest rates on all small saving products for the second quarter of the fiscal.

On PPF, the Ministry, in a notification, said, the subscribers can close the account if “the amount is required for serious ailments or life threatening diseases of the account holder, spouse, dependent children or parents…or the amount is needed for higher education of the account holder or the minor account holder.” It further added that supporting documents and bills will have to be produced.

But such subscribers will get one per cent interest less than other accounts. For instance, instead of an interest of the current 8.1 per cent, a subscriber who chooses to prematurely close his PPF account would earn interest of 7.1 per cent on the deposit. At present, withdrawals from the PPF account are allowed after seven years of opening the account. But it is only up to 50 per cent of the total deposit till the end of the fourth year. The account matures after 15 years, when full withdrawal is permitted.

Interest rate

“On the basis of the decision of the government, interest rates for small savings schemes are to be notified on quarterly basis,” said the Ministry on Monday. 

The return on PPF is maintained at 8.1 per cent in the July-September quarter, the same as that in the quarter ending June 30, 2016.

Similarly, the interest rate on the Kisan Vikas Patra has been maintained at 7.8 per cent for a maturity of 110 months, while the return on the five-year National Savings Certificate is 8.1 per cent. The government has moved to a quarterly reset of interest rates on small savings beginning this fiscal. Under the new mechanism, returns on these products are aligned with the market rates of the relevant Government securities, in order to improve the monetary transmission of interest rates by banks.

Source : http://www.thehindubusinessline.com/

Postal savings schemes to have passbooks

RATE REVISION HASN’T AFFECTED NUMBER OF DEPOSITORS, SAYS POSTMASTER GENERAL

From July 1, customers investing in Kisan Vikas Patra (KVP) and National Savings Certificates (NSC) will not be issued printed certificates. They will instead get them as passbooks.

Earlier, the Department of Posts planned to shift to issue the certificates in electronic mode.

However, officials said that as the efforts to issue e-certificates did not materialise, it was decided to provide KVP and NSC in the form of passbooks.

At present, about 25,000 certificates of KVP and NSC are being sold under various denominations every month in the Chennai city region. While the KVP is available from Rs.1,000 to Rs.50,000, the denomination for NSC starts at Rs.100 and is restricted to Rs.10,000.

Discontinued next month

Officials said issuing of certificates would be discontinued from next month as the printed forms with specific denominations had to be transported from another place.

“If there was a delay in obtaining the certificates of certain denomination, it led to shortage. Moreover, losing certificates also led to several complications,” said an official.

Now, customers can obtain a duplicate passbook in case of damage or loss.

Mervin Alexander, Postmaster General, said the number of customers depositing in various postal saving schemes had not decreased after revision of rates. Nearly 60,000 new accounts have been opened even after the interest rates were reduced up to one per cent over the past two months.

The Chennai city region contributes about 10 per cent of over six lakh deposits under various schemes in the State.

“Several people continue to invest mostly in Selvamagal Semippu account, public provident fund, senior citizen savings scheme and the NSC.

Saving schemes

Postal savings schemes contributed to about Rs.6,000 crore of total revenue earned during the last fiscal. Of this, nearly four per cent of revenue was gained from the NSC and KVP certificates,” he said.

Meanwhile, postal agents noted that some new investors hesitated to deposit in postal schemes after the dip in interest rates. S. Rajpandian, vice-president of Tamil Nadu Postal Agents Welfare Association, said: “The new rates have reduced by 0.6 per cent to one per cent, and some schemes like time deposit and monthly income scheme are witnessing a slight drop in customers. But, agents act as a bridge in canvassing for postal schemes and have to be encouraged with better incentives.”

Source :http://www.thehindu.com/

Sukanya Samridhi Yojana Model Calculation

Tax Rebate on Sukanya Samridhi Account ( SSA )

Sukanya Samriddhi Account ( SSA ) deposits eligible for deduction u/s 80C of Income Tax Act, 1961

Sukanya Samriddhi Account ( SSA ) deposits eligible for deduction u/s 80C of Income Tax Act, 1961

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF DIRECT TAXES

NOTIFICATION NO. 09/2015

INCOME-TAX

21 st January, 2015

In exercise of the powers conferred by clause (viii) of sub-section (2) of section 80C of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the “Sukanya Samriddhi Account” for the purposes of the said clause.

This notification shall come into force with effect from the date of its publication in the Official Gazette. [ F. NO. 178/3/2015-ITA-1 ]

For More Information Click Here

Sukanya Samruddhi Yojana ( For the Welfare of a Girl child )

 

 

This Poster created by eminent artist Shri Harshad Godbole for Sukanya Samruddhi Account / Yojana

Sukanya Samriddhi Account / Yojna Awareness Rally @ Datia Under Indore Region MP Circle dtd 13/02/2015

Collector Datia Mr. Prakash Jangre, SPO's Gwalior Dn A S Rathore, SDI (P) Datia sub Dn Mr. V P Rathore, PostMaster Datia MDG Mr. Ravindra Sharma, SM Datia MDG Mr R K Kushwah, SPM Datia Rajgarh P R Mishra...in SSA Awareness Rally at Datia District Gwalior Division Under Indore Region MP Circle.

Sukanya Samriddhi Account / Yojana - at a glance

Sukanya Samriddhi Account / Yojana is a Small Savings Special deposit Scheme for girl child. This scheme is specially designed for girl’s higher education or marriage needs.

The Scheme launched for the welfare of the girl child, to save and educate the girl child.

Features of Sukanya Samriddhi Account (SSA):

·           Who can open the account? – Sukanya Samriddhi Account (or Khata) can be opened on a girl child’s name by her natural (biological) parents or legal guardian.

·           What is the Age limit? – SSA can be opened in the name of a girl child from the birth of the girl child till she attains the age of  10 years.  ( As per SB Order No. 2/2015 : The Girl child who is born on or after  02.12.2003 can open account )

·           How many accounts can be opened? – A depositor may open and operate only one account in the name of same girl child under this scheme. The depositor (or) guardian can open only two SSA accounts. There is one exception to this rule. The natural or legal guardian can open two or three accounts if twin girls are born as second birth or triplets are born in the first birth itself.

·           How to open a SSA account? Accounts in name of the girl child can be opened in post offices or in any branch of a commercial bank that is authorized by the Central Government to open an account under this scheme rules.

·          What is the minimum deposit to open the account? – The account may be opened with an initial deposit of one thousand rupees. The minimum contribution in any financial year is Rs 1000. Thereafter the contributions can in multiples of one hundred rupees.

·          What is the maximum deposit amount? – a minimum of one thousand rupees shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed Rs 1.5 Lakh in a financial year.

·          Deposits in an account may be made till the child completes fourteen years, from the date of opening of the account.

·           Is there any penalty? – If minimum (Rs 1000 pa) amount is not deposited, the account will be treated as an irregular account. This can be regularized/renewed on payment of Rs 50 per year as penalty. Along with this, the minimum specified subscription for the year (s) of default should be paid.

·          What is the mode of deposit? – The deposits in Sukanya Samruddhi scheme can be made in the form of Cash or Demand Draft or Cheque. Where deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft shall be the date of credit to the account. The cheque or DD should be drawn in favour of the postmaster of the concerned post office or the Manager of the concerned bank. The depositor (parents or guardian) has to write the account holder’s name (child’s name) and the account number on the backside of the instrument.

·          What is the Rate of Interest on Sukanya Samriddhi Account? – The applicable rate of interest on SSA for the financial year 2014-2015 is 9.1%. This is one of the highest rates of interest offered by Government on small savings scheme

·          Is interest rate fixed or variable? – The rate of interest is not fixed and will be notified by the central government on a yearly basis.

·           The account can be transferred anywhere in India if the girl shifts to a place other than the city or locality where the account stands.

·            Is Premature withdrawal allowed? – 50 % (half of the fund) of the accumulated amount in SSA can be withdrawn for girl’s higher education and marriage after she attains 18 years of age. The account’s balance at the end of preceding financial year is used for the calculation.

·           Can the girl child operate the account? On attaining age of ten years, the account holder that is the girl child may herself operate the account, however, deposit in the account may be made by the guardian or parents.

·          Is premature closure allowed? In the event of death of the account holder, the account shall be closed immediately on production of death certificate. the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.

·         The scheme would mature on completion of 21 years.

·           Can the girl child continue the account after her marriage? – The operation of the account shall not be permitted beyond the date of the girl’s marriage.

·            What are the required documents to open Sukanya Samriddhi Account? – Birth certificate of the girl child has to be produced. The depositor (parents or guardian) has to submit his/her identity and address proofs.

·          On opening an account, the depositor shall be given a pass book. It will have date of birth of the girl child, date of opening of account, account number, name and address of the account holder and the initial amount deposited. The depositor has to present the passbook to the post office or bank at the time of depositing/receiving the interest/on maturity.

http://sapost.blogspot.in/

Tax Benefits on Sukanya Samriddhi Account Scheme

The amount that is deposited under Sukanya Samriddhi Account will be eligible for income tax exemption under Section 80C of Income Tax Act, 1961.

At present, only the contribution of up to Rs 1.5 lakh toward Sukanya Samridhi Yojana is eligible for tax deduction under Section 80C. But discussions are on to also exempt the interest income and withdrawal amount. We can expect a formal announcement on this in the coming Union Budget 2015-16.

(Issue of making interest income and withdrawal exempt from taxation can be done by Department of Revenue (DoR) through legislative amendments. The matter is under examination of DoR)

Sukanya Samriddhi Account vs Public Provident Fund (PPF)

Both Sukanya Samriddhi Account (SSA) and Public Provident Fund (PPF) aims to seed the savings habit but both schemes have their own pros and cons.

Stressing on the girls role in making the India competitive and prosperous nation, Prime Minister Shri Narendra Modi has today launched a new small savings account for the girl child “Sukanya Samriddhi Account” as an integral part of the “Beti Bachao-Beti Padhao” campaign.

Sukanya Samriddhi Account was initially introduced by Shri Arun Jaitely in his maiden budget speech but has been officially launched today by Prime Minister Shri Narendra Modi. He has handed over bank account details to five girls under the “Sukanya Samridhi Yojna” (girl child prosperity scheme).

Sukanya Samridhi Yojna is a special deposit scheme for girl child only but one another popular scheme to benefit child (irrespective of girl or boy) is Public Provident Fund (PPF).

Let’s see the difference between Sukanya Samriddhi Account and Public Provident Fund (PPF)

Sukanya Samriddhi Account vs Public ProvidentFund (PPF)

Points of Difference	Sukanya Samriddhi Account (SSA)	Public Provident Fund (PPF)
For whom	Only for Girl Child.	For every Indian Citizen.
Age Limit	From the birth till she attains age of 10 years.	No age limit.
By whom	By the girl child who has attained the age of 10 years or by the natural or legal guardian.	By the Individual but by the natural or legal guardian for the minor child.
Where to open	Post office and nationalized banks but not   private banks.	Post office and nationalized banks, including private banks.
Number of Account	One account for each girl child, maximum up to 2 or 3 accounts if twin girls are born in the second birth or triplets are born in the first birth.	Each Individual can hold only one account in   his name.
Minimum Contribution	Rs.1,000	Rs.500
Maximum Contribution	Rs.1.5 lakhs in all accounts.	Rs.1.5 lakhs in all accounts.
Interest Rate	9.1% per annum for fiscal year 2014-15.	8.70% per annum for fiscal year 2014-15.
Tax Benefit on the Contribution	Contributed Amount will be deductible u/s 80C.	Contributed Amount will be deductible u/s 80C.
Tax Benefit on the interest earned	At present no tax benefit is announced for the interest earned. A mere sum of Rs.1,5o0 will be deductible u/s 10(32) .	Interest Earned is tax free under PPF.
Time Period of contribution	Minimum tenure of contribution is 14 years from the date of opening of account.	Minimum 15 years and then in blocks of 5 years.
Maturity	21 years from the date of opening of account.	15 years from the fiscal year of opening of account.
Penalty	Rs.50 per year if minimum contribution is not made.	Rs.50 per year if minimum contribution is not made.
Mode of Deposit	Cash or Demand Draft or Cheque	Cash or Demand Draft or Cheque
Premature Withdrawal	Allowed up to 50% for the girl’s higher education and marriage after she attains 18 years of age	No premature withdrawal is allowed except in case of death of the account holder.
Loan	No loan can be taken on the SSA balance.	Loan can be taken from the third year of opening of account to the sixth year.
Taxation on Maturity	No tax will be levied on the maturity amount.	No tax will be levied on the maturity amount.

Note:

1.      Interest rate under both the schemes will be notified each year by the Government.

2.      Interest will be compounded yearly under both schemes.

3.      Loan on the PPF balance is restricted to 25% of the balance at the end of 2^nd year.

4.      At present interest earned on SSA account is taxable in the hands of guardian but it may get tax rebate in the upcoming budget.

5.    Contributed amount get deduction u/s 80c up to Rs.1.5 lakhs including all other eligible investments.

SB Order 02/2015 : Introduction of new scheme "Sukanya Samriddhi Account" under Small Savings Scheme from 22.01.2015. : View

Procedure for closure of NSS87 Accounts

Following is the procedure for closure of NSS87 Accounts

• If customer submits, 15G/15H update the same in CASBAM and verify; if not submitted, TDS recovery has to be done
• Account closure to be attempted in HCAAC
• If there is message to collect TDS charges, user has to check HACLI for the account and ensure interest amount is calculated and posted. In case of heavy loads on the server , the generation of interest might take some time, (10-15 minutes.)
• If HCACC is attempted before interest is posted, error message will be displayed in HCACC "Run HACINT"; do not report this as an error.
• After ensuring that interest is posted, Collect charges using HCACC and then proceed for closure in HCAAC.

Government may increase lock-in period for PPF; to offer higher interest rate for 20-year tenure

The government is likely to increase the lock-in period for Public Provident Fund (PPF) by at least two years, reports ET Now. 

According to ET Now sources in the Finance Ministry, those who invest in PPF will be able to withdraw after 8 years, as against the current 6-year lock-in period. The government is also likely to increase the tenure of PPF from 15 years to 20 years. 

"While it will be up to the saver to opt for either a 15-year or a 20-year saving period, the government will look to lure people with a higher interest rate for the 20-year tenure, under Section 80C," reported ET Now. "This implies that if the saver is willing to invest in PPF for 20 years, the subsequent tax benefit will be higher," the channel said. 

According to ET Now, the government is considering this move in order to ensure a stable source of infrastructure funding. 

Meanwhile the RBI has said that unbreakable high value fixed deposits will soon earn higher rate of interest. Depositors who place their savings with a bank earn differential rates of interest based on the size of deposit, less than Rs 1 crore and above Rs 1 crore, and the longer the period, the more the interest is. Additionally, deposits up to Rs 1 crore can be withdrawn prematurely, resulting in asset-liability mismatch. 

To correct this skew between the interest earned on loans and that paid to depositors, the RBI has allowed banks to offer deposit schemes up to Rs 1 crore, which cannot be broken prematurely, so-called non-callable deposits, but which can attract different rates of interest. This opens the prospect of retail depositors, who opt for such deposits, to earn a slightly better rate of interest than on a deposit which can be broken, or a callable deposit. 

At present, all deposits accepted from individuals and a Hindu Undivided Family of up to Rs 1 crore can be withdrawn prematurely, leading to asset-liability mismatches in banks. 

The RBI's latest decision is one of the major steps in the direction of interest rate rules linked to deposits, after the central bank allowed banks to offer floating rates on deposits a decade ago. The central bank will issue detailed guidelines soon. Premature withdrawals make banks' asset-liability management difficult. 

Source : The Economic Times

Sukanya samriddhi Account / Yojana account at a glance- wopostbank

Sukanya Samriddhi Account / Yojana is a Small Savings Special deposit Scheme for girl child. This scheme is specially designed for girl’s higher education or marriage needs.

The Scheme launched for the welfare of the girl child, to save and educate the girl child.

Features of Sukanya Samriddhi Account (SSA):

·           Who can open the account? – Sukanya Samriddhi a/c (or Khata) can be opened on a girl child’s name by her natural (biological) parents or legal guardian.

·           What is the Age limit? – SSA can be opened in the name of a girl child from the birth of the girl child till she attains the age of  10 years.  ( As per SB Order No. 2/2015 : The Girl child who is born on or after  02.12.2003 can open account )

·           How many accounts can be opened? – A depositor may open and operate only one account in the name of same girl child under this scheme. The depositor (or) guardian can open only two SSA accounts. There is one exception to this rule. The natural or legal guardian can open two or three accounts if twin girls are born as second birth or triplets are born in the first birth itself.

·           How to open a SSA account? Accounts in name of the girl child can be opened in post offices or in any branch of a commercial bank that is authorized by the Central Government to open an account under this scheme rules.

·          What is the minimum deposit to open the account? – The account may be opened with an initial deposit of one thousand rupees. The minimum contribution in any financial year is Rs 1000. Thereafter the contributions can in multiples of one hundred rupees.

·          What is the maximum deposit amount? – a minimum of one thousand rupees shall be deposited in a financial year but the total money deposited in an account on a single occasion or on multiple occasions shall not exceed Rs 1.5 Lakh in a financial year.

·          Deposits in an account may be made till the child completes fourteen years, from the date of opening of the account.

·           Is there any penalty? – If minimum (Rs 1000 pa) amount is not deposited, the account will be treated as an irregular account. This can be regularized/renewed on payment of Rs 50 per year as penalty. Along with this, the minimum specified subscription for the year (s) of default should be paid.

·          What is the mode of deposit? – The deposits in Sukanya Samruddhi scheme can be made in the form of Cash or Demand Draft or Cheque. Where deposit is made by cheque or demand draft, the date of encashment of the cheque or demand draft shall be the date of credit to the account. The cheque or DD should be drawn in favour of the postmaster of the concerned post office or the Manager of the concerned bank. The depositor (parents or guardian) has to write the account holder’s name (child’s name) and the account number on the backside of the instrument.

·          What is the Rate of Interest on Sukanya Samriddhi Account? – The applicable rate of interest on SSA for the financial year 2014-2015 is 9.1%. This is one of the highest rates of interest offered by Government on small savings scheme

·          Is interest rate fixed or variable? – The rate of interest is not fixed and will be notified by the central government on a yearly basis.

·           The account can be transferred anywhere in India if the girl shifts to a place other than the city or locality where the account stands.

·            Is Premature withdrawal allowed? – 50 % (half of the fund) of the accumulated amount in SSA can be withdrawn for girl’s higher education and marriage after she attains 18 years of age. The account’s balance at the end of preceding financial year is used for the calculation.

·           Can the girl child operate the account? On attaining age of ten years, the account holder that is the girl child may herself operate the account, however, deposit in the account may be made by the guardian or parents.

·          Is premature closure allowed? In the event of death of the account holder, the account shall be closed immediately on production of death certificate. the balance at the credit of the account shall be paid along with interest till the month preceding the month of premature closure of the account , to the guardian of the account holder.

·         The scheme would mature on completion of 21 years of the girl child, from the date of opening of the account, with an option of keeping the account till marriage.

·           Can the girl child continue the account after her marriage? – The operation of the account shall not be permitted beyond the date of the girl’s marriage.

·            What are the required documents to open Sukanya Samriddhi Account? – Birth certificate of the girl child has to be produced. The depositor (parents or guardian) has to submit his/her identity and address proofs.

·          On opening an account, the depositor shall be given a pass book. It will have date of birth of the girl child, date of opening of account, account number, name and address of the account holder and the initial amount deposited. The depositor has to present the passbook to the post office or bank at the time of depositing/receiving the interest/on maturity.

Tax Benefits on Sukanya Samriddhi Account Scheme

The amount that is deposited under Sukanya Samriddhi Account will be eligible for income tax exemption under Section 80C of Income Tax Act, 1961.

At present, only the contribution of up to Rs 1.5 lakh toward Sukanya Samridhi Yojana is eligible for tax deduction under Section 80C. But discussions are on to also exempt the interest income and withdrawal amount. We can expect a formal announcement on this in the coming Union Budget 2015-16.

(Issue of making interest income and withdrawal exempt from taxation can be done by Department of Revenue (DoR) through legislative amendments. The matter is under examination of DoR)

Sukanya Samriddhi Account vs Public Provident Fund (PPF)

Both Sukanya Samriddhi Account (SSA) and Public Provident Fund (PPF) aims to seed the savings habit but both schemes have their own pros and cons.

Stressing on the girls role in making the India competitive and prosperous nation, Prime Minister Shri Narendra Modi has today launched a new small savings account for the girl child “Sukanya Samriddhi Account” as an integral part of the “Beti Bachao-Beti Padhao” campaign.

Sukanya Samriddhi Account was initially introduced by Shri Arun Jaitely in his maiden budget speech but has been officially launched today by Prime Minister Shri Narendra Modi. He has handed over bank account details to five girls under the “Sukanya Samridhi Yojna” (girl child prosperity scheme).

Sukanya Samridhi Yojna is a special deposit scheme for girl child only but one another popular scheme to benefit child (irrespective of girl or boy) is Public Provident Fund (PPF).

Let’s see the difference between Sukanya Samriddhi Account and Public Provident Fund (PPF)

Sukanya Samriddhi Account vs Public Provident Fund (PPF)

Points of Difference	Sukanya Samriddhi Account (SSA)	Public Provident Fund (PPF)
For whom	Only for Girl Child.	For every Indian Citizen.
Age Limit	From the birth till she attains age of 10 years.	No age limit.
By whom	By the girl child who has attained the age of 10 years or by the natural or legal guardian.	By the Individual but by the natural or legal guardian for the minor child.
Where to open	Post office and nationalized banks but not   private banks.	Post office and nationalized banks, including private banks.
Number of Account	One account for each girl child, maximum up to 2 or 3 accounts if twin girls are born in the second birth or triplets are born in the first birth.	Each Individual can hold only one account in   his name.
Minimum Contribution	Rs.1,000	Rs.500
Maximum Contribution	Rs.1.5 lakhs in all accounts.	Rs.1.5 lakhs in all accounts.
Interest Rate	9.1% per annum for fiscal year 2014-15.	8.70% per annum for fiscal year 2014-15.
Tax Benefit on the Contribution	Contributed Amount will be deductible u/s 80C.	Contributed Amount will be deductible u/s 80C.
Tax Benefit on the interest earned	At present no tax benefit is announced for the interest earned. A mere sum of Rs.1,5o0 will be deductible u/s 10(32) .	Interest Earned is tax free under PPF.
Time Period of contribution	Minimum tenure of contribution is 14 years from the date of opening of account.	Minimum 15 years and then in blocks of 5 years.
Maturity	21 years from the date of opening of account.	15 years from the fiscal year of opening of account.
Penalty	Rs.50 per year if minimum contribution is not made.	Rs.50 per year if minimum contribution is not made.
Mode of Deposit	Cash or Demand Draft or Cheque	Cash or Demand Draft or Cheque
Premature Withdrawal	Allowed up to 50% for the girl’s higher education and marriage after she attains 18 years of age	No premature withdrawal is allowed except in case of death of the account holder.
Loan	No loan can be taken on the SSA balance.	Loan can be taken from the third year of opening of account to the sixth year.
Taxation on Maturity	No tax will be levied on the maturity amount.	No tax will be levied on the maturity amount.

Note:

1.      Interest rate under both the schemes will be notified each year by the Government.

2.      Interest will be compounded yearly under both schemes.

3.      Loan on the PPF balance is restricted to 25% of the balance at the end of 2^nd year.

4.      At present interest earned on SSA account is taxable in the hands of guardian but it may get tax rebate in the upcoming budget.

5.       Contributed amount get deduction u/s 80c up to Rs.1.5 lakhs including all other eligible investments.

Source : http://akulapraveen.blogspot.in/ & http://sapost.blogspot.in/