VittSphere ONE Calculators Blog CA Prabhakar Kumar · FCA · ICAI 560762
Calculators Blog Handle my notice
Case law › Circulars › 1985 › Circular No. 410
CBDT circular 12 February 1985

Circular No. 410

92. Whether interest earned from cumulative time deposit held under Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, is also exempt under clause (15)(ii) of section 10

What this is

Circular No. 410 was issued by the Central Board of Direct Taxes on 12 February 1985. Its subject is 92. Whether interest earned from cumulative time deposit held under Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, is also exempt under clause (15)(ii) of section 10.

This grants an exemption or a relief under a provision that allows one. Read the conditions attached: an exemption notification is construed strictly, and a condition missed is the exemption lost.

What it does

Holds that interest on a Post Office Savings Bank Cumulative Time Deposit account is exempt under section 10(15)(ii). Section 10(15)(ii) exempts interest on specified securities, interest on deposits in the Post Office Savings Bank and bonus on deposits under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959. Since a cumulative time deposit is only one kind of account under the Post Office savings accounts, the interest on it is likewise exempt, to the extent the deposit does not exceed the maximum amount that may be deposited or invested under the postal bank's regulations.

Why it was issued

A reference was made to the Board on whether interest received under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959 qualified, the clause naming only the bonus on such deposits alongside interest on Post Office Savings Bank deposits.

Who it reaches

The provisions it speaks to

Left, the provision of the Income-tax Act, 1961 as the instrument itself names it. Right, the section of the Income-tax Act, 2025 that the department’s own concordance maps it to — which is where the same ground is now covered.
Under the 1961 ActNow
s.10s.11, s.19

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

92. Whether interest earned from cumulative time deposit held under Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959, is also exempt under clause (15)(ii) of section 10
1. Section 10(15 )(ii) provides for exemption from tax in respect of interest on various specified securities, interest on deposits in Post Office Savings Bank and bonus in respect of deposits under the Post Office Savings Bank (Cumulative Time Deposits) Rules, 1959.
2. The Board have considered a reference on the eligibility of interest received under Post Office savings Bank (Cumulative Time Deposits) Rules, 1959. Since the Post Office Savings Bank (Cumu­lative Time Deposits) Rules, 1959 is only one kind of account under the Post Office Savings Accounts, such interest in respect of Post Office Savings Bank (Cumulative Time Deposits) Account is also exempt under section 10(15)(ii ) to the extent to which the deposit does not exceed the maximum amount to be deposited or invested therein (in accordance with the regulations of the postal bank).
Circular : No. 410 [F. No. 178/68/83-IT (A-I)], dated 12-2-1985.

What to watch

Where you meet it

In an assessment where post office cumulative time deposit interest has been brought to tax.

On the same provision

Other instruments in this library that name the same provision of the 1961 Act. They are not necessarily still operative, and a later one may have replaced an earlier one without saying so.

← Circular No. 409  ·  Circular No. 404 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.