INDIA: Interest From Seniors' PO Deposits Will Attract TDS

MUMBAI (ExpressMoney.in), May 20, 2006: The withdrawal of the 10 per cent maturity bonus from the Post Office Monthly Income Scheme (MIS) has made the Senior Citizens Savings Scheme (SCSS) relatively more attractive for senior citizens. A higher interest rate and a higher investment limit give SCSS the edge over MIS. However, the higher investment limit of Rs 15 lakh in the SCSS had created the issue of whether TDS would be applicable or not, she states. The ministry of finance has recently clarified that TDS will apply, and the RBI has subsequently notified banks about the same. Indian Posts notified the post offices last week, comments Uma Shashikant on TDS (Tax Deduction at Source) Procedures in the column First Principles today. Senior citizens whose taxable income is below Rs 1.85 lakh, including the interest on SCSS, will be required to submit a declaration under Form 15H to be exempt from TDS. The only pain in all this is that the scheme began in 2004, and TDS clarifications have come much later, applying retrospectively, creating avoidable multiple trips to banks and post offices for senior citizens. © Indian Express Newspapers (Mumbai) Ltd.