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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 ..... vely]. 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 such investments is included in the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 own name, Rs. 30,000 in the name of his wife, Rs. 10,000 in the name of his minor son and Rs. 15,000 in the name of his minor daughter, his entire holdings amounting to Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 ground that the income derived from the investments standing in the name of the wife or minor child is deemed to be the income of the husband and, therefore, the overall limit should be only Rs. 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary 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 allowed to invest (1) Rs. 25,000 in National Savings Certificates, and (2) Rs. 2,500 in National Plan Certificates. These two were discontinued from June 1, 1957 and replaced by National Plan Savings Certificates for which the limit is Rs. 25,000 for an individual. The earlier certificates will continue to get exemption up to the limits of Rs. 25,000 and Rs. 2,500 respectively. It ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasury 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 jointly, one-half of the joint holdings shall be deemed to belong to each. 3. The Board have decided that if in any case involving the application of section 16(3), the exemption available under clauses (xvii) and (xviia)of section 4(3) has been restricted in the past, relief should be given by the Commissioners under section 33A(1) by waiving the time limit, if necessary. Circular : N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Bank Accounts 25,000 50,000 3. Cumulative Time Deposit Accounts 90,000 1,80,000 The old certificates, covered under section 10(15)(ii), are as under : 1. TSDCs and DDCs. 2. PO Cash Certificates. 3. 12-Year National Plan Savings Certificates. 4. 12-Year National Defence Certificates. 5. 10-Year National Plan Certificates. The limits for these certificates are inclusive of the limits for National Savings Certificates II and III Issues. 4. Board's Circular No. 10(XLVII-9)-D, dated 20-5-1958 [Clarification 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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