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FMC
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Q What is FORWARD MARKETS
COMMISSION(FMC)?
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A:Forward Markets
Commission (FMC) headquartered at Mumbai, is a regulatory authority which is
overseen by the Ministry of Finance, Govt. of India. It is a statutory body
set up in 1953 under the Forward Contracts (Regulation) Act, 1952.
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Q What is Factoring ?
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A: It is a
financial transaction and a type of debtor finance in which a business sells
its accounts receivable (i.e., invoices) to a third party (called a factor
i.e. other than a Bank) at a discount. A business will sometimes factor its
receivable assets to meet its present and immediate cash needs.
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Q What is'FIAT
MONEY'?
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A:Currency that a
government has declared to be legal tender, but is not backed by a physical
commodity. The value of fiat money is derived from the relationship between
supply and demand rather than the value of the material that the money is
made of. Historically, most currencies were based on physical commodities
such as gold or silver, but fiat money is based solely on faith. Fiat is the
Latin word for "it shall be".
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Q What is Forgery ?
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A: when a
material alteration is made on a document or a Negotiable Instrument like a
cheque, to change the mandate of the drawer, with intention to defraud.
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Q. What are the salient features of the
Senior Citizens Savings Scheme, 2004?
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A:The salient
features of the Senior Citizens Savings Scheme, 2004 are given below.
Tenure of the
deposit account:5 years, which can be extended by 3 years.
Rate of
interest:9.3 per cent per annum
Frequency of
computing interest:Quarterly
Taxability:Interest
is fully taxable.
Whether TDS is
applicable:Yes. Tax will be deducted at source.
Investment to be
in multiples of:`1000/-
Maximum
investment limit:` 15 lakh
Minimum eligible
age for investment:60 years (55 years for those who have retired on
superannuation or under a voluntary or special voluntary scheme). The retired
personnel of Defence Services (excluding Civilian Defence Employees) will be
eligible to invest irrespective of the age limits subject to the fulfillment
of other specified conditions
Premature
closure/withdrawal facility:Permitted after one year of opening the account
but with penalty.
Transferability:Not
transferable
Tradability:Not
tradable
Nomination
facility:Nomination facility is available.
Modes of
holding:Accounts can be held both in single and joint holding modes. Joint
holding is allowed only with spouse.
Application forms
available with Post Offices and designated branches of 24 Nationalised banks
and one private sector bank
Applicability to
NRI, PIO and HUFs Non Resident Indians (NRIs), Persons of Indian Origin (PIO)
and Hindu Undivided Family (HUF) are not eligible to open an account under
the Scheme.
Transfer from one
deposit office to another
Transfer of
account from one deposit office to another is permitted.
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Q. Can a joint account be opened under
the scheme with any person?
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A:Joint account
under the SCSS, 2004 can be opened only with the spouse.
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Q. What should be the age of the spouse
in case of a joint account?
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A:In case of a
joint account, the age of the first applicant / depositor is the only factor
to decide the eligibility to invest under the scheme. There is no age
bar/limit for the second applicant / joint holder (i.e. spouse).
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Q. What will be the share of the joint
account holder in the deposit in an account?
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A:The whole
amount of investment in an account under the scheme is attributed to the
first applicant / depositor only. As such, the question of any share of the
second applicant / joint account holder (i.e. spouse) in the deposit account
does not arise.
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Q. Whether both the spouses can open
separate accounts in their individual capacity with separate limit of Rs.15
lakh for each of them?
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A:Both the
spouses can open individual and / or joint accounts with each other with the
maximum deposits up to Rs.15 lakh each, provided both are individually
eligible to invest under relevant provisions of the Rules governing the
Scheme. (Rules 3 and 4 )
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Q. Whether any income tax rebate /
exemption is admissible?
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A:No income tax /
wealth tax rebate is admissible under the Scheme. The prevailing Income Tax
provisions shall apply. (GOI letter F. No.2/8/2004/NS-II dated October 13,
2004)
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Q. Is TDS applicable to the scheme?
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A:Yes, TDS is
applicable to the Scheme as interest payments have not been exempted from
deduction of tax at source. (GOI letter F. No.2/8/2004/NS-II dated March 28,
2006)
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Q. Whether any minimum limit has been
prescribed for deduction of tax at source?
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A:Tax is to be
deducted at source as per the minimum limit prescribed by the Government.
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Q. What is the rate at which TDS is to be
deducted from the account holder?
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A:The rate for
TDS for a financial year is specified in Part II of Schedule I of the Finance
Act for that year. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
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Q. Whether TDS should also be recovered
from the undrawn interest payable to the legal heirs of the deceased
depositors?
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A:Tax shall be
deducted at source even from any interest paid / payable to the legal heir of
the account holder. (GOI letter F. No.2/8/2004/NS-II dated June 06, 2006)
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Q. Whether TDS on interest payments will
be applicable with retrospective effect or prospective basis?
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A:TDS is
applicable from the very first day when SCSS, 2004 was made operational
regardless of the fact that the Central Government or Reserve Bank of India
or any authority might have issued any Notification / circular /
clarification at a later stage. (GOI letter F. No.2/8/2004/NS-II dated June
06, 2006)
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Q. Whether only one person or number of
persons can be nominated in the accounts opened under the Scheme?
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A:The depositor
may, at the time of opening of the account, nominate a person or persons who,
in the event of death of the depositor, will be entitled to payment due on
the account.
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Q. Can a nomination be made after the
account has already been opened?
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A:Yes, nomination
may be made by the depositor at any time after opening of the account but
before its closure, by an application in Form C accompanied by the Pass book
to the deposit office.
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Q. Can a nomination be cancelled or
changed?
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A:Yes, the
nomination made by the depositor may be cancelled or varied by submitting a
fresh nomination in Form C to the deposit office where the account is being
maintained.
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Q. Can nomination be made in joint
account also?
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A:Nomination can
be made in joint account also. In such a case, the joint holder will be the
first person entitled to receive the amount payable in the event of death of
the depositor. The nominee’s claim will arise only after the death of both
the joint holders.
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Q. Can a person holding a Power of
Attorney sign for the nominee in the nomination form ?
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A:No, a person
holding a Power of Attorney cannot sign for the nominee in the nomination
form. (GOI letter No. F.15/8/2005/NS-II dated March 02, 2006)
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Q. In case of a joint account, if the
first holder / depositor expires before maturity, can the account be
continued?
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A:In case of a
joint account, if the first holder / depositor expires before the maturity of
the account, the spouse may continue the account on the same terms and
conditions as specified under the SCSS Rules. However, if the second holder
i.e. spouse has his / her own individual account, the aggregate of his/her
individual account and the deposit amount in the joint account of the
deceased spouse should not be more than the prescribed maximum limit. In case
the maximum limit is breached, then the remaining amount shall be refunded,
so that the aggregate of the individual account and deceased spouse’s joint
account is maintained at the maximum limit.
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Q. What happens to the accounts if both
the spouses are maintaining individual accounts and not any joint account and
one of them expires?
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A:If both the
spouses have opened separate accounts under the scheme and either of the
spouses dies during the currency of the account(s), the account(s) standing
in the name of the deceased depositor/spouse shall not be continued and such
account(s) shall be closed. The account can be closed by making an
application in Form ‘F’. Annexures II & III to Form ‘F’ can be attested
by the Oath Commissioner or Notary Public [Rule 8].
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Q. Whether any fee has been prescribed
for nomination and / or change / cancellation of nomination?
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A:No fee has been
prescribed for nomination and / or change / cancellation of nomination(s) in
the accounts under the SCSS, 2004. (GOI letter F. No.2/8/2004/NS-II dated
October 13, 2004)
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Q. What is the age limit in the case of
retired Defence Personnel for investment in the scheme?
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A:The retired
personnel of Defence Services (excluding Civilian Defence Employees) will be
eligible to subscribe under the scheme irrespective of the age limit of 60
years subject to the fulfillment of other specified conditions. (The Senior
Citizens Savings Scheme (Amendment) Rules, 2004 notified on October 27, 2004)
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Q. What is the meaning of ‘retirement
benefits’ for the purpose of SCSS, 2004?
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A:"Retirement
benefits" for the purpose of SCSS Rules have been defined as 'any
payment due to the depositor on account of retirement whether on
superannuation or otherwise and includes Provident Fund dues, retirement /
superannuation gratuity, commuted value of pension, cash equivalent of leave,
savings element of Group Savings linked Insurance scheme payable by employer
to the employee on retirement, retirement-cum-withdrawal benefit under the
Employees’ Family Pension Scheme and ex-gratia payments under a voluntary
retirement scheme'. (Rule 2 (a) of the Senior Citizens Savings Scheme
(Amendment) Rules, 2004 notified on October 27, 2004)
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Q. Can deposits under the SCSS scheme be
made only from amounts received as retirements benefits?
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A:In case an
investor has attained the age of 60 years and above, the source of amount
being invested is immaterial [Rule 2 (d)(i)]. However, if the investor is 55
years or above but below 60 years and has retired under a voluntary scheme or
a special voluntary scheme or has retired from the Defence services, only the
retirement benefits can be invested in the SCSS. [Rule 2(d) (ii)].
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Q. Is there a period prescribed for
opening deposit account under the SCSS scheme, by the senior citizen, from
the retirement benefits?
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A:If the investor
is 60 years and above, there is no time period prescribed for opening the
SCSS account(s). However for those below 60 years, following time limits have
been prescribed.
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(a) the persons
who have attained the age of 55 years or more but less than 60 years and who
retired under a voluntary retirement scheme or a special voluntary retirement
scheme on the date of opening of an account under these rules, subject to the
condition that the account is opened by such individual within three months
of the date of retirement.
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(b) the persons
who have retired at any time before the commencement of these rules and
attained the age of 55 years or more on the date of opening of an account
under these rules, will also be eligible to subscribe under the scheme within
a period of one month of the date of the notification of the SCSS, 2004 i.e.
27th October 2004, subject to fulfillment of other conditions. [Rule 2 of the
Senior Citizens Savings Scheme (Amendment) Rules, 2004]
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(c) the retired
personnel of Defence Services (excluding Civilian Defence Employees) will be
eligible to subscribe under the scheme irrespective of the above age limits
subject to the fulfillment of other specified conditions. [Rule 2 of the
Senior Citizens Savings Scheme (Amendment ) Rules, 2004]
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Q. Can an account holder obtain loan by
pledging the deposit / account under the SCSS, 2004?
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A:The facility of
pledging the deposit / account under the SCSS, 2004 for obtaining loans, is
not permitted since the account holder will not be able to withdraw the
interest amount periodically, defeating the very purpose of the scheme. (GOI
letter F. No.2/8/2004/NS-II dated May 31, 2005)
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Q. Is premature withdrawal of the
deposits from the accounts under the SCSS, 2004 permitted?
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A:Premature
withdrawal / closure of the deposits from the accounts under the SCSS, 2004
has been permitted after completion of one year from the date of opening of
the account after deducting the penalty amount as given below.
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(i) If the
account is closed after one year but before expiry of two years from the date
of opening of the account, an amount equal to one and half per cent of the
deposit shall be deducted.
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(ii) If the
account is closed on or after the expiry of two years from the date of opening
of the account, an amount equal to one per cent of the deposit shall be
deducted.
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However, if the
depositor is availing the facility of extension of account under Rule 4 (3),
then he/she can withdraw the deposit and close the account at any time after
the expiry of one year from the date of extension of the account without any
deduction. [Rule 9 (1) (a) (b) and (2)]
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Q. Are Non-resident Indians, Persons of
Indian Origin and Hindu Undivided Family eligible to invest in the SCSS,
2004?
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A:Non resident
Indians (NRIs), Persons of Indian Origin (PIO) and Hindu Undivided Family
(HUF) are not eligible to invest in the accounts under the SCSS, 2004. If a
depositor becomes a Non-resident Indian subsequent to his/her opening the
account and during the currency of the account under the SCSS Rules, the
account may be allowed to continue till maturity, on a non-repatriation basis
and the account will be marked as a Non-Resident account. [Rule 13 and GOI
letter F.No.2/8/2004/NS-II dated June 19, 2006)
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Q. Can an account be transferred from one
deposit office to another?
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A:A depositor may
apply in Form G, enclosing the Pass Book thereto, for transfer of his account
from one deposit office to another. If the deposit amount is rupees one lakh
or above, a transfer fee of rupees five per lakh of deposit for the first
transfer and rupees ten per lakh of deposit for the second and subsequent
transfers shall be payable. [Rule 11 and GOI Notification GSR.(E) dated March
23, 2006)
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Q. Can an SCSS account be extended?
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A:A depositor may
extend the account for a further period of three years by making an
application to the deposit office within a period of one year after maturity.
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Q. Does an account, which is not extended
on maturity, earn any interest?
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A:In case a
depositor does not close the account on maturity and also does not extend the
account, the account will be treated as matured and the depositor will be
entitled to close the account at any time subject to the condition that the
post maturity interest at the rate as applicable to the deposits under the
Post office Savings Accounts from time to time will be payable on such
matured deposits upto the end of the month preceding the month of the closure
of the account.
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Q. What happens if an account is opened
in contravention of the SCSS Rules?
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A:If an account
has been opened in contravention of the SCSS Rules, the account shall be
closed immediately and the deposit in the account, after deduction of the
interest, if any, paid on such deposit, shall be refunded to the depositor.
(Rule 12)
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Q. Whether commission is payable to the
agents under the Scheme?
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A:Payment of
commission on the Scheme has been discontinued w.e.f. December 1, 2011
(Government of India Notification dated November 25, 2011).
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Q. Which are the banks authorized to open
an account under the SCSS, 2004?
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A:At present, 24
Public Sector banks and one private sector bank, as per list below, are
authorized to handle the SCSS, 2004. It may be noted that only designated
branches of these banks have been authorized to handle SCSS, 2004.
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State Bank of
India
State Bank of
Hyderabad
State Bank of
Bikaner and Jaipur
State Bank of
Patiala
State Bank of
Mysore
State Bank of
Travancore
Allahabad Bank
Andhra bank
Bank of Baroda
Bank of India
Bank of
Maharashtra
Canara Bank
Central Bank of
India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas
Bank
Punjab National
Bank
Syndicate Bank
UCO Bank
Union Bank of
India
United Bank of
India
Vijaya Bank
IDBI Bank
ICICI Bank Ltd.
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