NATIONAL SAVINGS
CERTIFICATES (VII ISSUE)
RULES, 1981*
GSR 310(E), DATED 24-4-1981
In exercise of the powers conferred by section 12 of the Government Savings Certificates Act, 1959 (46 of 1959), the Central Government hereby makes the following rules, namely :-
Short title, commencement and application.
1. (1) These rules may be called the National Savings Certificates (VII Issue) Rules, 1981.
(2) They shall come into force on the 1st day of May, 1981.
(3) They shall apply to the National Savings Certificates (VII Issue).
Definitions.
2. In these rules, unless the context otherwise requires :-
(i) Act means the Government Savings Certificates Act, 1959 (46 of 1959);
(ia) cash means cash in Indian currency ;
(ii)certificate means the National Savings Certificates (VII Issue) ;
(iii) co-operative society means a society registered or deemed to have been registered under the Co-operative Societies Act, 1912, or under any other law for the time being in force ;
(iv) corporation means a corporation established by, or under any law for the time being in force, but does not include a company ;
(v) Form means a form appended to these rules ;
(vi) Government company means a company as defined in section 617 of the Companies Act, 1956 (1 of 1956) ;
(vii) identity slip means an identity slip issued to a holder of a certificate under rule 12 ;
(viii) local authority means a municipal corporation, municipal committee, district board, body of port commissioners or other authority legally entitled to or entrusted by the Government with the control or management of a municipal or local fund ;
(viiia) non-resident has the meaning assigned to it in clause (30) of section 2 of the Income-tax Act, 1961 (43 of 1961) ;
(ix) old certificate means a certificate issued under the Post Office Savings Certificates Rules, 1960, or the National Savings Certificates (First Issue) Rules, 1965, or the National Savings Certificates (IV Issue) Rules, 1970, or the National Savings Certificates (V Issue) Rules, 1973, or a Bond issued under the National Development Bonds Rules, 1977;
(x) post office means any post office in India doing savings bank work;
(xi) resident in India has the meaning assigned to it in the Income-tax Act,
1961 (43 of 1961).
** ** **
Procedure for purchase of certificate.
6. Any person desiring to purchase a certificate, shall present at a post office, an application-
(i) in Form 1, or
(ii) if such application made by any person referred to in the proviso to this rule or rule 8, in Form 1A (obtainable free of cost at all post offices), either in person or through an authorised agent of the Small Savings Schemes :
Provided that where the applicant is an individual not being a citizen of India or not being a person of Indian origin, who is a non-resident or, as the case may be, who is not resident in India, prior approval of the Reserve Bank of India for the purchase of the certificate shall be necessary.
Explanation : For the purposes of this rule, a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.
Purchase of certificates on behalf of others.
7. A person or body specified in column I of the Table below may purchase certificate(s) on behalf of persons specified against his or its name in the corresponding entry in column II of the said Table :
Provided that the persons specified in the said column II are eligible under these rules to purchase certificates.
TABLE
|
I |
II |
|
Person or body who can purchase |
On behalf of |
|
(i) an adult |
a minor |
|
(ii) a co-operative society including a co-operative bank or a scheduled bank |
its members, clients, employees or contractors whose moneys are held as deposit or otherwise with such society or bank |
|
(iii) a Gazetted Government Officer, an officer of a Government company or of a corporation or of a local authority, or an officer of a corporate body like a marketing committee established under a State Act and authorised by the State Government in this behalf, in his official capacity, or the Reserve Bank of India. |
persons whose moneys are held as deposit or otherwise with such officer or the Reserve Bank |
Legal tender.
8. Payment for the purchase of a certificate may be made to a post office in any of the following modes, namely :-
(i) cash ;
(ii) a cheque, pay order or demand draft drawn in favour of the Postmaster ;
(iii) duly signed withdrawal form together with the pass book for withdrawal from the post office savings bank account :
(iv) surrender of a matured old certificate duly discharged as follows :
Received payment through issue of fresh certificate, vide application attached:
Provided that where the applicant is an individual, being a citizen of India or a person of Indian origin who is a non-resident or, as the case may be, who is non-resident in India, he shall, if he desires to avail of the benefits under clause (4B) of section 10 of the Income-tax Act, 1961 (43 of 1961), or clause (xvic) of sub-section (1) of section 5 of the Wealth-tax Act, 1957 (27 of 1957), or clause (iid) of sub-section (1) of section 5 of the Gift-tax Act, 1958 (18 of 1958), as the case may be, make such payment only in any of the following modes, namely :-
(a) a cheque in favour of the Postmaster drawn by the applicant on his Non-Resident (External) Account with a bank branch in India;
(b) a demand draft or pay order in favour of the Postmaster issued by a bank branch in India by debit to the applicants Non-Resident (External) Account or by withdrawal from his Foreign Currency (Non-Resident) Account together with a certificate from the said bank branch stating that the said demand draft or pay order has been issued by debit to or withdrawal from the said account;
(c) a demand draft drawn in favour of the postmaster by a bank in a country outside India on its branch or correspondent bank in India;
(d) cash, together with foreign inward remittance certificate or bank certificate indicating conversion of foreign exchange in rupees or bank certificate issued in favour of the applicant stating that the funds have emanated from the applicants Non-Resident (External) Account or Foreign Currency (Non-Resident) Account.
Explanation : For the purposes of this rule, a person shall be deemed to be of Indian origin if he, or either of his parents or any of his grand-parents, was born in undivided India.
Issue of certificates.
9. (1) On payment being made under rule 8 except where payment is made by a cheque, pay order or demand draft a certificate shall normally be issued immediately, and the date of such certificate shall be the date of payment.
(2) Where payment for the purchase of a certificate is made by a cheque, pay order or demand draft, the certificate shall not be issued before the proceeds of the cheque, pay order or demand draft, as the case may be, are realised and the date of such certificate shall be the date of encashment of the cheque, pay order or demand draft, as the case may be:
Provided that where the payment for purchase of certificate/certificates is made by means of a cheque, pay order or demand draft expressed in a foreign currency and the proceeds thereof are not equivalent to the face value of the certificate or the certificates applied for, a certificate or certificates shall be issued for the maximum aggregate face value possible within the said proceeds but in any case not exceeding the aggregate face value of the certificate or the certificates applied for and any balance amount of the said proceeds shall be refunded to the applicant or to any person authorised by him to receive such amount or credited to the savings account, if any, of the applicant in the post office savings bank :
Provided further that where the payment is made in the manner specified in clause (a) of the proviso to rule 8 the certificate shall be issued only after the post office receives an intimation from the drawee bank branch that the cheque has been paid by debit to the applicants Non-resident (External) Account with the said drawee bank branch.
(3) If for any reason a certificate cannot be issued immediately, a provisional receipt shall be given to the purchaser which may later be exchanged for a certificate and the date of such certificate shall be as specified in sub-rule (1) or sub-rule (2), as the case may be.
Certificate in lieu of proceeds of old certificate.
10. A holder of an old certificate entitled to encash that certificate may make an application in Form 1 for the grant of a certificate under these rules; on receipt of such an application, there shall be issued to the applicant a certificate under these rules, the date of issue being the date on which the old certificate duly discharged is presented:
Provided that the facility of issue of a certificate in lieu of an old certificate specified in this rule shall not be available to a person who is a non-resident or, as the case may be, who is not resident in India.
** ** **
Nomination.
18. (1) Subject to the provisions of sub-rules (2) to (6), the single holder or joint holders of a certificate may, by filling in necessary particulars in Form 1, or as the case may be, Form 1A at the time of purchasing the certificate,nominate any person who, in the event of death of the single holder or both the joint holders, as the case may be, shall become entitled to the certificate and to the payment of the amount due thereon. If such nomination is not made at the time of purchasing the certificate, it may be made by the single holder, the joint holders or the surviving joint holder, as the case may be, at any time after the purchase of the certificate but before its maturity, by means of an application in Form 2 to the Postmaster of the office at which the certificate stands registered.
(2) There shall not be more than one nominee, except in cases where the denomination of a certificate is Rs. 500 or more.
(3) No nomination shall be made in respect of a certificate applied for and held by or on behalf of a minor.
(4) A nomination made by the holder or holders of a certificate under this rule may be cancelled or varied by submitting an application in Form 3 affixing postage stamps of the value specified in sub-rule (2) of rule 29 together with the certificate to the Postmaster of the post office at which the certificate stands registered.
(5) Separate applications for nomination or cancellation of a nomination or variation of a nomination shall be made in respect of certificates registered on different dates.
(6) The nomination or the cancellation of a nomination or the variation of a nomination shall be effective from the date it is registered in the post office, which date shall be noted on the certificate.
Encashment on maturity and payment of interest.
19. (1) The maturity period of a certificate of any denomination shall be six years commencing from the date of the certificate. A certificate shall be encashable at par at any time after the expiry of its maturity period.
(2) Interest on a certificate of any denomination shall be payable at the end of every six months from the date of the certificate, but not beyond the maturity period, for which the certificate is held. Such interest shall be calculated at the rate of 12 per cent per annum on the face value of the certificate.
Note: The interest for each six-monthly period can be claimed at any time after the expiry of that period and where for any reason such interest having income due has not been claimed, no additional interest on that ground shall be payable under any circumstances :-
Provided that where a certificate has been purchased on or after the 1st March, 1983, by or on behalf of an individual specified in the proviso to rule 8 and payment therefor has been made in any of the modes specified in the said proviso, the interest payable under this sub-rule shall be calculated at the rate of 13 per cent per annum on the face value of the certificate.
1[(3) Where a certificate of any denomination has been purchased on or after the 1st day of April, 1987 the interest on such certificate shall be payable at the end of every six months from the date of the certificate but not beyond the maturity period for which the certificate is held.Such interest shall be calculated at the rate of 11 per cent per annum of the face value of the certificate.]
Premature encashment.
20. (1) Notwithstanding anything contained in rule 19 and subject to sub-rules (2) and (3), a certificate purchased on or after the 1st day of April, 1986, may be prematurely encashed in any of the following circumstances, namely:-
(a) on the death of the holder or both the holders in case of joint holders;
(b) on forfeiture by a pledgee being a Gazetted Government Officer, when a pledge is in conformity with the provisions of these rules;
(c) when ordered by a court of law.
(2) If a certificate is encashed under sub-rule (1), the face value of the certificate shall be payable after deducting therefrom discount as specified below :
(i) If a certificate is encashed discount equivalent to the interest
before the expiry of one paid or payable under sub-rule(2)
year from the date of the of rule 19.
certificate
(ii) If the certificate is encashed after discount equivalent to the difference
the expiry of one year but before between :
the expiry of three years from the (a) the interest paid or payable
date of the certificate under sub-rule (2) of rule 19 ;
and
(b) simple interest calculated on the
face value of the certificate at
the rate applicable from time to
time to single accounts under
the Post Office Savings Account
Rules, 1981, for the complete
months for which the certificate
has been held.
2[(3)(a) If a certificate purchased on or after 1st day of April, 1986, but before the 1st day of April, 1987, is encashed under sub-rule (1) after expiry of three years from the date of the certificate, the amount payable after adjustment of discount, shall be as specified in the Table below :
TABLE
|
Period from the date of the certificate to the date of its encashment |
Amount payable (Rs.)on a certificate of Rs. 100 denomination |
|
(1) |
(2) |
|
3 years or more, but less than 3 years and 6 months |
91.55 |
|
3 years and 6 months or more, but less than 4 years |
89.90 |
|
4 years or more, but less than 4 years and 6 months |
88.15 |
|
4 years and 6 months or more, but less than 5 years |
86.35 |
|
5 years or more, but less than 5 years and 6 months |
84.45 |
|
5 years and 6 months or more, but less than 6 years |
82.45 |
_______________________________________________________________
Note : The amount payable after adjustment of discount on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.
(b) If a certificate purchased on or after 1st day of April, 1987, is encashed under sub-rule (1) after expiry of three years from the date of the certificate, the amount payable after adjustment of discount shall be as specified in the Table below :-
TABLE
Amount payable after adjustment of discount on premature encashment of certificate purchased on or after 1st day of April, 1987
|
Period from the date of the certificate to the date of its encashment |
Amount payable (Rs.)on a certificate of Rs. 100 denomination |
|
(1) |
(2) |
|
3 years or more, but less than 3 years and 6 months |
94.95 |
|
3 years and 6 months or more, but less than 4 years |
93.95 |
|
4 years or more, but less than 4 years and 6 months |
92.90 |
|
4 years and 6 months or more, but less than 5 years |
91.80 |
|
5 years or more, but less than 5 years and 6 months |
90.70 |
|
5 years and 6 months or more, but less than 6 years |
89.50 |
_______________________________________________________________
Note : The amount payable after adjustment of discount on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.
(4) Notwithstanding anything contained in sub-rule (3), where a certificate has been purchased on or after the 1st March, 1983, by or on behalf of an individual specified in the proviso to rule 8 and payment therefor has been made in any of the modes specified in the said proviso, the amount payable on encashment of such certificate after the expiry of three years from the date of the certificate, after adjustment of discount, shall be as specified in the Table below :-
TABLE
Amount payable after adjustment of discount on premature encashment of a certificate
|
Period from the date of the certificate to the date of its encashment |
Amount payable on a certificate of Rs. 100 denomination
(Rs.) |
|
3 years or more, but less than 3 years and 6 months |
88.15 |
|
3 years and 6 months or more, but less than 4 years |
85.85 |
|
4 years or more, but less than 4 years and 6 months |
83.45 |
|
4 years and 6 months or more, but less than 5 years |
80.90 |
|
5 years or more, but less than 5 years and 6 months |
78.25 |
|
5 years and 6 months or more, but less than 6 years |
75.45 |
_______________________________________________________________
Note : The amount payable after adjustment of discount on a certificate of any other denomination shall be proportionate to the amount specified in the Table above.
** ** **
Income-tax.
28. Interest on certificates specified in sub-rule (2) of rule 19 shall be liable to tax under the Income-tax Act, 1961 (43 of 1961), but no tax shall be deducted at the time of payment of interest:
Provided that such interest shall not, in the case of certificate purchased under rule 6 or rule 7 by or on behalf of a person who is a non-resident, be liable to tax subject to the fulfilment of the conditions specified in this behalf in the Act.
Wealth-tax.
28A. Subject to the conditions specified in this behalf in the Wealth-tax Act, 1957 (27 of 1957), wealth-tax shall not be payable in respect of certificates purchased under rule 6 or rule 7 by or on behalf of a person who is not resident in India.
Gift-tax.
28B. Subject to the conditions specified in this behalf in the Gift-tax Act, 1958 (18 of 1958), gift-tax shall not be charged in respect of gifts made by a person who is not resident in India to any relative of such person in India in the form of certificate purchased by such person under rule 6 or on his behalf under rule 7.
Fees.
29. (1) A fee of rupee one in the case of a certificate of the denomination of Rs.500 or above and a fee of twenty-five paise in any other case shall be chargeable in respect of the following transactions, namely :-
(i) transfer of certificate from one person to another, other than a transfer from the holder to a court of law or under the orders of a court of law;
(ii) issue of a duplicate certificate under rule 17;
(iii) issue of a certificate of discharge under rule 22; and
(iv) conversion from one denomination to another under rule 27:
Provided that no fee shall be chargeable in respect of such transactions in the case of a certificate purchased by a person who is a non-resident or, as the case may be, who is not resident in India.
Explanation I : The fee to be charged for the issue of a certificate of discharge under clause (iii) shall be calculated separately on the aggregate face value of all certificates which were purchased on any one application and which are included for discharge certificate.
Explanation 2 : The fee to be charged for a conversion under clause (iv) shall be based on the number and denomination of the certificates required to be issued on such conversion.
(2) A fee of fifty paise shall be chargeable on every application for registration of nomination, or of any variation in nomination or cancellation thereof:
Provided that no fee shall be charged on an application for registration of the first nomination :
Provided further that no fee shall be charged in the case of a certificate purchased by a person who is non-resident or, as the case may be, who is not resident in India.
Responsibility of the post office.
30. The post office shall not be responsible for any loss caused to a holder by any person obtaining possession of a certificate and fraudulently encashing it.
Rectification of mistakes.
31. The Director General, Posts and Telegraphs or the Postmaster-General or Heads of Postal Divisions in their respective jurisdictions, may either suo motu or upon an application by any person interested in any certificate issued in pursuance of these rules, rectify any clerical or arithmetical mistakes with respect to that certificate, provided that it does not involve any financial loss to the Government or to any such person.
Power to relax.
32. Where the Central Government is satisfied that the operation of any of the provisions of these rules causes undue hardship to the holder or holders of a certificate, it may, by order, for reasons to be recorded in writing, relax the requirements of that provision in a manner not inconsistent with the provisions of the Act.
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