Government of India
Notification No. 08/2017 was published on 13 September 2017. Its subject is Government of India.
This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.
A notification of the Principal Director General of Income-tax (Systems) on the deduction of tax at source on interest on deposits under the Capital Gains Accounts Scheme, 1988 where the depositor has died. It records that banks have been deducting tax and issuing certificates in the name of the deceased depositor, which is not in accordance with law. In exercise of the powers delegated by the Board under sub-rule (5) of rule 31A of the Income-tax Rules, 1962, it specifies that tax on interest accrued for and up to the period of the depositor's death is to be deducted and reported against the PAN of the depositor, and tax on interest accrued for the period after the death is to be deducted and reported against the PAN of the legal heir, unless a declaration is filed under sub-rule (2) of rule 37BA to that effect.
The notification says it was brought to the Board's notice that banks were deducting tax and issuing certificates in the name of a deceased depositor on deposits under the Capital Gains Accounts Scheme, 1988, which is not in accordance with the law.
Government of India
Ministry of Finance
Central Board of Direct Taxes
Directorate of Income-tax (Systems)
New Delhi
Notification No. 08/2017 New Delhi, 13'th, September, 2017
Subject: - TDS on interest on deposits made under the Capital Gains Accounts Scheme, 1988 where the depositor has deceased - reg.-It has been brought to the notice of CBOT that in cases of deceased depositor who has made deposits under the Capital Gains Accounts Scheme, 1988; the banks are deducting TDS on the interest earned on such deposits in the hand of the deceased depositor and issuing TDS certificates in the name of the deceased depositor, which is not in accordance with the law. Ideally in such type of situations, the TDS certificate on th e interest income for and upto the period of death of the depositor is required to be issued on the PAN of the deceased depositor and forthe period after death ofthe depositor is required to be issued on the PAN of the legal heir.
2. Under sub-rule (5) of Rule 31A of the Income-tax Rules, 1962, the Director General of Income-tax (Systems) is authorized to specify the procedures, formats and standards for the purposes of furnishing and verification of the statements or claim for refund in Form 26B and shall be responsible for the day-to-day administration in relation to furnishing and verification of the statements or claim for refund in Form 26B in the manner 50 specified.
3. In exercise of the powers delegated by the Central Board of Direct Taxes (Board) under sub-rule (5) of Rule 31A of the Income-tax Rules, 1962, the Principal Director General of Income-tax (Systems) hereby specifies that in case of deposits under the Capital Gains Accounts Scheme, 1988 where the depositor has deceased:
(i). TDS on the interest income accrued for and upto the period of death of the depositor is required to be deducted and reported against PAN of the depositor, and
(ii). TDS on the interest income accrued for the period after death of the depositor is required to be deducted and reported against PAN of the legal heir,
unless a declaration is filed under sub-rule(2) of Rule 37BA of the Income-tax Rules, 1962 to that effect.
4. This issues with approval of the Principal Director General of Income-tax (Systems).
Copy for kind information to:-
(P .. T ingaleng)
Dy. Commissioner of Income-tax (CPC-TDS),
O/O the Pro Director General of Income-tax (Systems),
New Delhi1. PPSto the Chairman and all Members, CBDT, North Block, New Delhi.
2. All Pro Chief Commissioners/Pro Director Generals of Income-tax/Chief Commissioners of Income-tax/Pr. Commissioners of Income-tax/Commissioners of Incometax/Commissioners of Income-tax {TDS} with a request to circulate amongst all officers in their regions/charges.
3. JS (TPL}-I & II / Media Coordinator and Official spokesperson of CBDT.
4. ADG(IT) / ADG(Audit) / ADG(Vig.) / ADG(Systems)1, 2, 3, 4, 5 / ADG(TPS)-l, 2 / CIT(CPCITR) / CIT (CPC-TDS).
5. ADG (PR, PP & OLIo
6. TPL, ITA and IT{B} divisions of CBDT.
7. The Institution of Chartered Accountants of India, I.P. Estate, New Delhi.
8. The Web-Manager, 'incometaxindia.gov.in' for hosting on the website.
9. Database cell for uploading on www.irsofficersonline.gov.inand in DG!T{Systems} corner.
10. ITBA publisher for uploading in ITBA portal.
11. ITO (CPC-TDS}-I! for uploading on TRACES portal.
In the certificate of tax deducted issued by a bank on a Capital Gains Accounts Scheme deposit of a deceased depositor, and in the credit for that tax claimed in the return of the depositor or of the legal heir.
Rules it names. Rule 31A, 37BA of the Income-tax Rules, 1962. The 1962 Rules were replaced by the Income-tax Rules, 2026, which renumbered nearly everything: a rule number quoted here almost never means the same rule today.
← Notification No. 85/2017[F. No. 200/24/2017-ITA-I] / SO 3129(E) · Notification No. 83/2017[F. No. 199/3/2017-ITA-I] / SO 2830(E) →
Source: the Income Tax Department’s own published text — its page for this instrument.