TDS on Senior Citizen Saving Scheme

This query is : Resolved

c.v.naik

c.v.naik (Querist)
Follow

17 October 2009 A friend of mine, being sr. citizen deposited Rs.1,50,000 in Mumbai GPO in 2004 carrying 9% interest.

Though he is PAN holder, he is not filing income tax returns since his income was within tax exemption limit.He used to submit 15-G form to the post office to avoid TDS.

Now the deposit is maturing in the current financial year.

The post office has informed him to submit xerox copies of his income tax returns for the financial year from 2004-05 to 2008-09 otherwise the post office shall deduct TDS for all these years from the maturity amount and will issue TDS certificates

Please advice

Rajeev

Rajeev (Expert)
Follow

18 October 2009 i dont think so that the PO is within their rights to ask for an IT return at the time of maturity of the deposit.

Once 15G is submitted by the assessee , the liability to deduct TDS is extinguished .

Whether you pay the tax or no , is no headache of the Post office .

Given them copies of 15G for all the years which may have been submitted by you and draft a letter , and CC it to the senior officer explaining that 15G has already been submitted and his income is below the taxable limit . Also does your frnd have a pan number which is mentioned in 15G ?

I guess they are just doing this to harass your frnd.have they given this in writing ? I feel really sorry for senior citizens in this country who are harassed unneccessarily .

Although there are certain amendments in this years bill whereby 206AA has been inserted but these provisions are applicable from 1/4/2010 ( for pan number to be mentioned in 15G/H )

Deepak Goel

Deepak Goel (Expert)
Follow

18 October 2009 No, Post Office does not have any right to ask your Income Tax return and that interest pertaining to that years only. You have also submitted 15G in every year for non-dedcution of TDS due to non-taxable income. In the maturity year, PO can deduct TDS if your income is taxable or you will not submit 15G/H.

c.v.naik

c.v.naik (Querist)
Follow

19 October 2009 Dear Rajiv/ Deepak Goel
Thank you very much for your valuable advice.
There is a letter No.lDDSB/SCSS/TDS/09-10 dated 12th October 2009 from the Office of Director Mumbai GPO 400001,asking to furnish xerox copies of Income Tax returns else TDS shall be deducted from the maturity amount.