1372. Exemption of deposits under National Deposit Scheme under clause (xxva) of sub-section (1) – Condition regarding six months’ holding period laid down in sub-section (3) waived for assessment year 1985-86

1. Attention is invited to paragraph 35 of Circular No. 387, dated 6-7-1984, containing the Explanatory Notes on the provisions relating to Direct Taxes in the Finance Act, 1984.

2. It has been pointed out in paragraph 35.2 of the aforesaid circular that deposits under such National Deposit Scheme as may be framed by the Central Government and notified by it in this behalf in the Official Gazette would qualify for exemption under section 5 of the Wealth-tax Act. It has also been pointed out that, as in the case of other financial assets, exemption in respect of deposits under such National Deposit Scheme will be available only where such assets have been held by the assessee for a period of at least six months ending with the relevant valuation date.

3. The National Deposit Scheme opened for subscription by the public only from July 30, 1984. As the aforesaid requirement of continuous holding of the asset for a period of at least six months before the valuation date would result in the denial of the tax concession in many cases for the assessment year 1985-86, Government has decided, as a special case, that the condition regarding the six months’ holding period laid down in section 5(3) would be treated as satisfied if the deposit made by the taxpayer under the said Scheme is continuously held by him from the date of the deposits until the relevant valuation date, even though the said period of holding is less than six months.

4. Paragraph 35.2 of the Board’s Circular No. 387, dated 6-7-1984 would stand modified to the extent indicated in the preceding paragraph.

Circular : No. 401 [F. No. 317/29/84-WT], dated 27-10-1984.

More Under Income Tax

Posted Under

Category : Income Tax (25520)
Type : Circulars (7563) Notifications/Circulars (30679)

Leave a Reply

Your email address will not be published. Required fields are marked *