National Deposits Scheme - Income Tax - 401/1984

National Deposits Scheme Circular No. 401 Dated 30/1/1984 Attention is invited to paragraph 35 of Circular No. 387 dated the 6th July, 1984*, containing the Explanatory Notes on the provisions relating to direct taxes in the Finance Act, 1984. 2. It has been pointed out in paragraph 35.2 of the aforesaid Circular that deposits under such National Deposits Scheme as may be framed by the Central Government and notified by it in this behalf in the Official Gazette would qualify for exemption under section 5 of the Wealth-tax Act. It has also been pointed out that, as in the case of other financial assets, exemption in respect of deposits under such National Deposits Scheme will be available only where such assets have been held by the assessee for a period of at least six months ending with the relevant valuation date. 3. The National Deposits Scheme opened for subscription by the public only from the 30th July, 1984. As the aforesaid requirement of continuous holding of the asset for a period of at least six months before the valuation date would result in the denial of the tax concession in many cases for the assessment year 1985-86, Government has decided, as a special case, that the condition regarding the six months holding period laid down in section 5(3) of the Wealth-tax Act would be treated as satisfied if the deposit made by the taxpayer under the said Scheme is continuously held by him from the date of the deposits until the relevant valuation date, even though the said period of holding is less than six months. 4. Paragraph 35.2 of Board's Circular No. 387 dated the 6th July, 1984*, would stand modified to the extent indicated in the preceding paragraph. * See p. 1 (supra).