TMI BlogExemption of interest on savings certificates under clause (15)(ii) - Interest on holdings in the names of wife and minor children whether eligible for exemption - Exemption in the event of death of one of the joint holdersX X X X Extracts X X X X X X X X Extracts X X X X ..... on p. 170 and p. 171, respectively]. 2. It has been brought to the notice of the Board by the National Savings Commissioner that some Income-tax Officers are not giving exemption from income-tax on tax-free savings certificates and accounts held in the names of the spouse and minor children of the assessee. 3. Under the rules governing the issue of the various savings certificates and accounts, deposits may be made by an adult individual in his own name or by two adults jointly or by a guardian on behalf of a minor. Various limits have been laid down for these accounts and certificates for individuals and for two persons jointly. Where any assessee makes an investment in the name of his wife or minor child, the income derived from s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in a year Joint investments not allowed These limits are for the entire period of the accounts standing in the name of the assessee or his minor children and wife. 5. The certificates covered under section 10( 15 )( ii ) which have since been discontinued but interest on which continues to be free of income-tax are as under: 1. 10-Year TSDCs and 10-Year DDCs. 2. PO Cash Certificates. 3. 12-Year National Plan Savings Certificates. 4. 10-Year National Defence Certificates. 5. 10-Year National Plan Certificates. The limits for these certificates are inclusive of limits for National Savings Certificates II and III Issues mentioned above. For example, if a person holds NSCs II and III Issues up to Rs. 35,000 in his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult individual in his own name or by two adults jointly or by a guardian on behalf of a minor. The limit laid down for an individual is Rs. 25,000 and for an individual jointly with another is Rs. 50,000. Where an assessee makes investments in the name of his wife or minor child, the income derived from such investments is included in the total income of the assessee under the provisions of section 16(3). If an assessee has invested Rs. 25,000 in the 10-Year Treasury Savings Deposit Certificates in his own name and Rs. 25,000 in the name of his wife or a minor child, it has been the practice of Income-tax Officers to allow the exemption only in respect of the interest derived from the former amount and not in respect of the latter on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,500 5,000 5. National Plan Savings Certificates (Issued from June 1, 1957) 25,000 50,000 6. Treasury Savings Deposit Certificates 25,000 50,000 7. 15-Year Annuity Certificates (Discontinued from January 2, 1958) 28,000 56,000 8. 15-Year Annuity Certificates—2nd Series (Issued from January 2, 1958) 26,600 53,200 NOTE 1 : Prior to June 15, 1947, the Post Office used to issue Post Office Cash Certificates in which an individual could invest up to Rs. 10,000 in his own name or in two joint names. Persons who are still holding these certificates will continue to get exemption up to this limit. NOTE 2 : Prior to June 1, 1957, an individual was allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old certificates of the 1st and 2nd series exceeding in value twenty-eight thousand rupees, taking into account the holding in his own name or holdings held by him jointly with any other holder. For the purpose of calculating the individual holding, when a certificate is held by two persons jointly, one-half of the amount shall be deemed to belong to each. NOTE 4 : No holder of Treasury Savings Deposit Certificates shall under any circumstances hold certificates exceeding twenty-five thousand rupees in value, taking into account the holding in his own name or holdings held by him jointly with any other holder. For the purposes of calculating the individual holding of Treasury Savings Deposit Certificates, when two persons hold them join ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the certificates, the surviving joint holder would continue to get exemption from tax on the interest received up to the maximum amount permitted to be held in the case of joint holdings. Following are the various investments in Small Savings Certificates and Accounts covered by the provisions of section 10 (15)( ii ) along with the limits of investments singly and jointly by the holders of these certificates/accounts : Nature of investments Limits up to which investments can be made singly Limits up to which investments can be made jointly Rs. Rs. 1. National Savings Certificates II III Issues combined 50,000 1,00,000 2. Post Office Savings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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