Case law › Circulars › 2011 › Circular No. DGBA. CDD. No. H-8545/15.15.001/2010-11

CBDT circular 9 June 2011

Circular No. DGBA. CDD. No. H-8545/15.15.001/2010-11

Non-implementation of Senior Citizens Savings Scheme-2004 (Scss) by Certain Banks on Deposit by Army Personnel

What this is

Circular No. DGBA. CDD. No. H-8545/15.15.001/2010-11 was issued by the Central Board of Direct Taxes on 9 June 2011. Its subject is Non-implementation of Senior Citizens Savings Scheme-2004 (Scss) by Certain Banks on Deposit by Army Personnel.

What it does

Pulls up agency banks that were refusing accounts under the Senior Citizens Savings Scheme, 2004 to retired army personnel, contrary to the Government's Office Memorandum of 29 October 2004 circulated to banks in October 2004. Banks are told to adhere strictly to those instructions and to extend the scheme's benefits to retired army personnel where the case is otherwise in order, and to bring this to the notice of all branches operating the scheme. The annexed Office Memorandum sets out the eligibility as amended on 27 October 2004: a person retiring on superannuation or otherwise who has attained 55 years but is under 60 on the date of opening the account may subscribe, the minimum age of 60 continuing to apply in every other case; and Defence Personnel other than Civilian Defence Employees who retired on superannuation may subscribe irrespective of the age limits, while those retiring otherwise than on superannuation may subscribe only after attaining 55 years.

Why it was issued

It was brought to the banking regulator's notice that some agency banks were not implementing the 2004 instructions and had denied the scheme to retired army personnel.

Who it reaches

Retired defence personnel wishing to open an account under the scheme
Civilian Defence Employees, who are outside the special relaxation
Persons aged between 55 and 60 who have retired
Agency bank branches operating the scheme

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.

NON-IMPLEMENTATION OF SENIOR CITIZENS SAVINGS SCHEME-2004 (SCSS) BY CERTAIN BANKS ON DEPOSIT BY ARMY PERSONNEL
CIRCULAR NO. DGBA. CDD. NO. H-8545/15.15.001/2010-11, DATED 9-6-2011
It has been brought to our notice that some of the agency banks do not implement the instructions given in Government of India's Office Memorandum F. No. 2-8/2004-NS-II, dated October 29, 2004 (Annexure) and circulated to agency banks vide our Circular RBI/2004-05/259 Ref. CO. DT. No. 15.05.001/H-3999-4021/2004-05, dated October 30, 2004, particularly in case of retired army personnel and have denied the facility of this Scheme to some of them in contravention of the instructions ibid.
2. We, therefore, reiterate that you may strictly adhere to the instructions issued vide our above circular and ensure extending the benefits of the scheme to retired army personnel also, if otherwise found in order.
3. You may bring the contents of this and the earlier circulars to all your branches dealing with this scheme.
ANNEXURE
Clarifications regarding Senior Citizens Savings Scheme, 2004 (SCSS)
OFFICE MEMORANDUM [F.NO.2-8/2004-NS-II], DATED 29-10-2004
The undersigned is directed to say that this Ministry has issued certain amendments to the Senior Citizens Savings Scheme Rules, 2004 (SCSS) on 27th October, 2004. A 'Press Communiqué' was also issued to this effect on 28th October, 2004. It has been reported in certain sections of the 'Press' that the scheme has been modified to include all persons who are 55 years but less than 60 years of age, as eligible persons for the purpose of this scheme.
2. It is, however, clarified that only persons retiring on superannuation or otherwise and who have attained the age of 55 years or more but less than 60 years on the date of opening of account, have been made eligible to subscribe to the scheme vide the amendment referred to above.
3. The minimum age limit of 60 years shall continue to apply in all other cases as per the specified provisions.
4. It is further clarified that only Defence Personnel (excluding Civilian Defence Employees), retired on superannuation, shall be eligible to subscribe irrespective of the age limits. Personnel, retiring otherwise than on superannuation, shall be eligible to subscribe to the scheme only after attaining the age of 55 years.
5. Copies of signed notification effecting the amendments have already been sent to the Department of Posts and Reserve Bank of India for their information and necessary action vide this Department's letter of even No. dated 27th October, 2004.
6. The above clarifications may kindly be brought to the notice of all concerned immediately in order to avoid any wrong interpretation/irregular investments. This may kindly be treated as most immediate
Receipt of this OM may kindly be acknowledged by return fax.

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What to watch

The relaxation from the age limits is for Defence Personnel retired on superannuation and expressly excludes Civilian Defence Employees.
A person who retired otherwise than on superannuation gets in only after attaining 55 years; the exemption from the age limit does not extend to him.
Sixty years remains the minimum age in every case that does not fall in these carve outs.
This is a banking circular on scheme eligibility, not a tax circular; it says nothing about the deduction available on a deposit or the taxability of the interest.

Where you meet it

Where a bank branch refuses to open an account under the scheme for a retired defence person on the ground of age.

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.