Circular No. H-7815/15.01.001/2011-12

Special Deposit Scheme (SDS), 1975 - Revision of Rate of Interest

What this is

Circular No. H-7815/15.01.001/2011-12 was issued by the Central Board of Direct Taxes on 6 June 2012. Its subject is Special Deposit Scheme (SDS), 1975 - Revision of Rate of Interest.

What it does

Notifies the revised interest rates on deposits under the Special Deposit Scheme for non-Government provident, superannuation and gratuity funds, announced by the notification of 30 June 1975. By the notification of 13 March 2012 the rate is 8.6 per cent per annum with effect from 1 December 2011, and by the notification of 22 May 2012 it is 8.8 per cent per annum with effect from 1 April 2012 until further orders.

Why it was issued

It communicates the Government's notifications revising the rates; no other reason is given.

Who it reaches

Non-Government provident funds with deposits under the scheme
Approved superannuation and gratuity funds holding such deposits
Trustees and auditors computing fund income for those years

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.

Special Deposit Scheme (SDS), 1975 - Revision of Rate of Interest
circular DGBA. CDD. No. H-7815/15.01.001/2011-12, dated 6-6-2012
The Government of India has vide Notifications, as detailed below, notified revision in the interest rates on the deposits under the Special Deposit Scheme for Non-Government Provident, Superannuation and Gratuity Funds, announced in the Ministry of Finance (Department of Economic Affairs) Notification No.F.16(1)-PD/75 dated June 30, 1975.

Notification details
Rate of Interest
With effect from

Government of India, Ministry of Finance (Department of Economic Affairs) Notification No.5(4) - B(PD)/2011 dated March 13, 2012
8.6% per annum (eight point six per cent per annum)
December 01, 2011

Government of India, Ministry of Finance (Department of Economic Affairs) Notification No.5(4) - B(PD)/2012 dated May 22, 2012 (to be published as a Gazette Notification)
8.8% per annum (eight point eight per cent per annum)
April 01, 2012 until further orders.

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What to watch

The two rates run from different dates — 8.6 per cent from 1 December 2011 and 8.8 per cent from 1 April 2012 — so a financial year straddles both.
The later rate runs until further orders, so a subsequent notification displaces it.
This concerns the rate of interest on the deposits and says nothing about the tax treatment of the fund's income.

Where you meet it

When interest accrued on a fund's special deposit is computed or verified for a year covered by these rates.

← Circular No. 03/2012 · Circular No. 05/FT&TR/2012 [F. NO. 500/15/2011-FT&TR-I], 2012 →

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.