Dear Sirs,
I advised my friend to park the proceeds from sale of residential property in Capital Gains Term Deposit with Canara Bank, until further course of action ( to buy another residential property or to invest in 54EC bonds of REC ).
Accepting my suggestion, he approached Canara Bank and sought to place the funds in a 2 year Capital Gains Scheme Fixed Deposit, with interest payment frequency being quarterly.
My firend specifically requested the Bank to credit the quarterly interest to his normal Savings Bank Account but the Bank refused to accept his request; they stated that the interset credit will go ONLY to the Capital Gains Scheme SB account and not to the normal SB account.
Which practically means he can not utilise the interest earned on the Term Deposit as he pleases.
On the contrary, the annual interest paid by REC, etc on 54EC Exemption bonds are automatically credited to the depositor's normal SB account, which means he is free to use the amount for any purpose.
Is Canara Bank correct in refusing the request to credit interest to normal SB account?
Kindly clafiry, Sirs,......
CAclubindia
