Senior Citizen's Savings Scheme
• 9% interest per annum payable quarterly
• Minimum Deposit: Rs.1,000 and multiples thereof
• Maximum Limit: 15 Lakhs
• The scheme is for 5 years and can be extended for a further period of 3 years
• Premature closure facility is available after 1 year with nominal penalty
• Risk free investment
• Individual aged of 60 years and above can invest
• Retiring employees aged 55 years and above can invest under scheme
• A tax saving instrument
• Joint account can be opened with spouse
• Best Return
• Very Safe investment - A central govt. scheme
Public Provident Fund
• The rate of interest is 9.5% compounded annually
• The minimum deposit is Rs.500 p.a.
• The maximum is Rs.70,000 p.a.
• Interest is totally tax free
• Tax saving instrument under section 80C
• Loan facility available from third year
• The PPF Scheme is a statutory scheme of the Central Government of India.
• The Scheme is for 15 years
• One deposit with a minimum amount of Rs.500 is mandatory in each financial year
• The deposit can be in lump sum or in convenient installments, not more than 12 installments in a year or two installments in a month, subject to total deposit of Rs.70,000
• It is not necessary to make a deposit in every month of the year
• The amount of deposit can be varied to suit the convenience of the account holders
• The account in which deposits are not made for any reason is treated as discontinued, account and such an account cannot be closed before maturity
• The discontinued account can be activated by payment of the minimum deposit of Rs.500 with default fee of Rs.50 for each defaulted year
• The account can be opened by an individual or a minor through the guardian
• Joint account is not permissible
• Those who are contributing to GPF Fund or EDF account can also open a PPF account
• A Power of Attorney holder can neither open nor operate a PPF account
• The grandfather/mother cannot open a PPF on behalf of his/her minor grandson/daughter.
• The deposits shall be in multiples of Rs.5 subject to minimum of Rs.500
• The deposit in a minor account is clubbed with the deposit of the account of the guardian for the limit of Rs.70,000
• No age is prescribed for opening a PPF account
• Interest is not contractual but the rate is notified by the Ministry of Finance, GoI, at the end of each year
• The facility of first withdrawal in the 7th year of the account subject, to a limit of 50% of the amount at credit preceding three year balance
• Thereafter one withdrawal in every year is permissible
• Premature closure of a PPF Account is not permissible except in case of death
• Nominee/legal heir of PPF Account holder on death of the account holder cannot continue the account
• The account has to be closed in such case
• The account holder has an option to extend the PPF account for any period in a block of 5 years at each time
• The account holder can retain the account after maturity for any period without making any further deposits
• The account holder can retain the account after maturity for any period without making any further deposits
• The balance in the account will continue to earn interest at normal rate as admissible till the account is closed
• One withdrawal in each financial year is also admissible in such account
• A PPF account can be opened either in a Post Office or in a Nationalsed Banks
• The Account is transferable from one Post Office to another and from Post Office to Bank or from a Bank to a Post office
• Account is transferable from one Bank to another bank as well as within the bank to any branch
• Deposits in PPF qualify for rebate under section 80-C of Income Tax Act.
• The interest on deposits is totally tax free
• Deposits are exempt from wealth tax
• The balance amount in the PPF account is not subject to attachment under any order or decree of court in respect of any debt or liability
• Nomination facility is available.
• The Best option for long term investment
Post Office Time Deposit Scheme
• Interest payable annually but calculated quarterly at following rates:
Period Rate of Interest
One Year 6.25%
Two Years 6.50%
Three Years 7.25%
Five Years 7.50%
• Minimum amount of deposit is Rs.200
• No maximum limit
• Account can be closed after 6 months but before one year without any interest
• Facility of redeposit on maturity of an account
• No interest is payable on un-drawn interest amount
• Account can be opened by an individual, two adults jointly and minor through guardian
• A Minor who has attained the age of 10 years can open the account in his/her own name to be operated directly
• Non Resident Indian / HUF cannot open the account
• Any number of accounts can be opened
• Two, three and five years accounts can be closed after one year at a discounted rate of interest
• Deposits not drawn on maturity are eligible to saving account interest rate for a maximum period of two year
• Account can be pledged as security against a loan to banks/ Government institutions
• Accounts are transferable from one Post office to any Post office in India
• Rebate under section 80-C is not admissible
• Interest income is taxable
• Deposits are exempt from wealth tax
• No TDS
• Nomination facility available
Post Office MIS
• Interest rate of 8% per annum payable monthly
• 5% bonus also payable on maturity period is 6 years
• Minimum investment amount is Rs.1,500 or in multiple thereof
• Maximum amount is Rs.4.50 lakhs in a single account and Rs.9 lakhs in a joint account
• Premature encashment facility after one year
• No TDS
• Account can be opened by an individual, two/three adults jointly, and a minor through a guardian
• A minor having attained 10 years of age can open an account in his/her own name directly
• Non-Resident Indian / HUF cannot open an Account. Minors have a separate limit of investment of Rs.3 lakhs and the same is not clubbed with the limit of guardian
• A separate account is opened for each deposit
• Any number of accounts can be opened subject to the maximum prescribed limit
• Facility of automatic credit of monthly interest to saving account if accounts are at the same post office
• Facility of premature closure of account after 1 year to 3 years @ 2.00% discount
• Deduction of 1% if account is closed prematurely at any time after three years
• Facility of reinvestment on maturity of an account
• Interest not withdrawn does not carry any interest
• Maturity proceeds not drawn are eligible to earn savings account interest rate for a maximum period of two years
• Account is transferable to any Post Office in India, free of cost
• Nomination facility is available
• Rebate under section 80 C is not admissible
• Most suitable scheme for senior citizens and for those who need regular monthly income
• Deposits are exempt from Wealth Tax
National Savings Certificate
• Rs.1,000 grows to Rs.1,601 in six years
• Minimum investment Rs.500
• Maximum no limit
• Certificates can be pledged as security against a loan to banks/ financial Institutions
• A Tax saving investment under Sec 80C
• Individual or minor can apply
• Rate of interest 8% compounded half yearly
• Two adults, individuals, and minor through guardian can purchase
• Companies, Trusts, Societies or any other Institutions are not eligible to purchase
• Non-resident Indian/HUF cannot purchase
• No premature encashment
• Annual interest earned is deemed to be reinvested and qualifies for tax rebate for the first 5 years under section 80 C of the Income Tax Act
• Maturity proceeds not drawn are eligible to Post Office Savings Account interest for a maximum period of two years
• Facility of reinvestment on maturity
• Facility of encashment of certificates through banks
• Certificates are en-cashable at any Post Office in India before maturity by way of transfer to desired Post Office
• Certificates are transferable to any Post office in India
• Certificates are transferable from one person to another person before maturity
• Duplicate certificate can be issued for in case the original one gets lost, stolen, destroyed, mutilated or defaced certificate
• Nomination facility is available.
• Facility of purchase/payment to the holder of Power of Attorney
• Tax Saving instrument - Rebate admissible under section 80 C of the Income Tax Act
• Deposits are exempt from Wealth Tax
Kisan Vikas Patra
• Money doubles in 8 years and 7 months
• Facility for premature encashment
• No maximum limit on investment
• No TDS
• Rate of interest 8% compounded annually
• Two adults, individuals and minor through guardian can purchase
• Companies, Trusts, Societies or other Institutions are not eligible to purchase
• Non-Resident Indian/HUF are not eligible to purchase
• Maturity proceeds not drawn are eligible for Post Office Savings account interest for a maximum period of two years
• Facility of reinvestment on maturity
• KVPs can be pledged as security against a loan to Banks/Govt. Institutions
• KVPs are encashable at any Post Office before maturity by way of transfer to desired Post office
• KVPs are transferable to any Post Office in India
• KVPs are transferable from one person to another person before maturity
• Duplicate can be issued for lost, stolen, destroyed, mutilated and defaced parts
• Nomination facility is available
• Facility of purchase/payment of Kisan Vikas Patras to the holder of Power of Attorney
• Rebate under section 80 C is not admissible
• Deposits are exempt from Wealth Tax
Bonds
6.5% Tax-free bonds has been withdrawn from the market. This will not effect the investments already made.
2. Taxable Bonds
The salient features of the Bond are as follows:
The Bonds may be held by -
a) an individual, not being a Non-Resident Indian (NRI)
i) in his or her individual capacity, or
ii) in an individual capacity on joint basis, or
iii) in an individual capacity on anyone or survivor basis, or
iv) on behalf of a minor as father/mother/legal guardian
b) a Hindu Undivided Family
c) As follows
i) 'Charitable Institution' to mean a Company registered under Section 25 of the Indian Companies Act 1956 or
ii)an institution which has obtained a Certificate of Registration as a charitable institution in accordance
with a law in force; or
iii)any institution which has obtained a certificate from Income Tax Authority for the purpose of
Section 80G of the Income Tax Act, 1961
d) "University" means a university established or incorporated by a Central, State or Provincial Act, and includes an institution declared under section 3 of the University that Act, 1956 (3 of 1956), to be a university for the purposes of that Act
Limit of Investment
There is no maximum limit for investment in the Bonds
Tax Treatment
• Income-Tax: Interest on the Bonds will be taxable under the Income-Tax Act, 1961 as applicable according to the relevant tax status of the bond holder
• Wealth Tax: The Bonds will be exempt from Wealth-tax under the Wealth- Tax Act, 1957
Issue Price
• The Bonds will be issued at par i.e. at Rs.100 percent
• The Bonds will be issued for a minimum amount of Rs.1,000 (face value) and in multiples thereof. Accordingly, the issue price will be Rs.1,000 for every Rs.1,000(Nominal)
Subscription
Subscription to the Bonds will be in the form of Cash/Drafts/Cheques. Cheques or drafts should be drawn in favor of the Receiving Office, specified in paragraph 10 below and payable at the place where the applications are tendered.
Date of Issue
• The Bonds will be issued with effect from 21st April 2003
• The date of issue of the Bonds in the form of Bond Ledger Account will be the date of receipt of subscription in cash or the date of realisation of draft/cheque
Form
• The Bonds will be issued and held at the credit of the holder in an account called Bond Ledger Account (BLA)
• New Bond Ledger series with the prefix (TB) are to be opened. All investment in 8% Savings (Taxable) Bonds by an existing BLA holder will be viewed as a new investment under a new BLA
• The Bonds in the form of Bond Ledger Account will be issued by and held with designated branches of the agency banks and SHCIL as authorized by Reserve Bank of India in terms of paragraph 10 below
• The Certificate of Holding in respect of Bond Ledger Account will be issued in Form TBX or Form TBY as applicable for non-cumulative and cumulative investments respectively
• The Certificate of Holding in respect of cash applications may be issued on the same day as per the extant instructions
Applications
• Applications for the Bonds may be made in Form ‘A’ (Annex 2) or in any other form as near as thereto stating clearly the amount and the full name and address of the applicant
• Applications should be accompanied by the necessary payment in the form of cash/drafts/cheques as indicated in paragraph 6 above
• Applicants who have obtained exemption from tax under the relevant provisions of the Income Tax Act, 1961, shall make a declaration to that effect in the application (in Form 'A') and submit a true copy of the certificate obtained from Income-Tax Authorities.
Receiving Offices
Applications for the Bonds in the form of Bond Ledger Account will be received at:
a) Authorised Branches of State Bank of India, Associate Banks, Nationalised Banks,
private sector banks and SHCIL as specified in the Annex 3
b) Any other bank or branches of the banks and SHCIL as may be specified
by the Reserve Bank of India in this regard from time to time.
Nomination
A sole holder or a sole surviving holder of a Bond, being an individual, may nominate in form B (Annex – 4) or as near thereto as may be, one or more persons who shall be entitled to the Bond and the payment thereon in the event of his/her death.
Transferability
The Bond in the form of Bond Ledger Account shall not be transferable.
Interest
a) The bond will be issued in cumulative and non-cumulative form, at the option of the investor
b) The Bond will bear interest at the rate of 8% per annum. Interest on non-cumulative bonds will be payable at half-yearly intervals from the date of issue in terms of paragraph 7 above. Interest on cumulative bonds will be compounded with half-yearly rests and will be payable on maturity along with the principal. In the latter case, the maturity value of the Bonds shall be Rs.1,601 (being principal and interest) for every Rs.1,000 (Nominal). Interest to the holders opting for non-cumulative Bonds will be paid from date of issue in terms of paragraph 7 above upto31st July/31st January, as the case may be and thereafter at half-yearly for period ending 31st July/31st January on 1st August and 1st February. Interest on Bond in the form of "Bond Ledger Account" will be paid, by cheque/warrant or through ECS by credit to bank account of the holder as per the option exercised by the investor/holder.
Advances/Tradability against Bonds
The Bonds shall not be tradable in the secondary market and shall not be eligible as collateral for loans from banks, financial Institutions and Non Banking Financial Companies, (NBFC) etc.
Repayment
The Bonds shall be repayable on the expiry of 6 (Six) years from the date of issue. No interest would accrue after the maturity of the Bond.
