168. Clarification regarding investment in ‘Kisan Vikas Patra’ and ‘Indira Vikas Patra’
1. Sub-section (5) of section 11 of the Income-tax Act, 1961 specifies the forms and modes of investment or deposit or surplus money by public charitable or religious trusts and institutions as referred to in section 11(2)( b) of the Act. Clause (i) of the said sub-section (5) specifies one of the forms of investment as investment in savings certificates as defined in clause (c) of section 2 of the Government Savings Certificates Act, 1959, and any other securities or certificates issued by the Central Government under the Small Savings Scheme.
Online GST Certification Course by TaxGuru & MSME- Click here to Join
2. Representations have been received seeking clarification whether investments in ‘Indira Vikas Patra’ and ‘Kisan Vikas Patra’ are covered by the form or mode of investment specified in the aforesaid clause ( i) of sub-section (5) of section 11.
3. Section 2(c ) of the Government Savings Certificates Act, 1959, defines ‘savings certificates’ as certificates to which that Act applies. Section 12 of the said Act empowers the Central Government to make rules to carry out the purposes of that Act. The Indira Vikas Patra Rules, 1986, and the Kisan Vikas Patra Rules, 1988, have been notified by the Central Government in exercise of the powers conferred by the aforesaid section 12 of the Government Savings Certificates Act, 1959. Thus, both these Patras are savings certificates to which the aforesaid Government Savings Certificates Act, 1959 applies. These are, therefore, covered by section 11(5)(i) of the Income-tax Act read with section 2(c) of the Government Savings Certificates Act.
4. It is, therefore, clarified that the investments in ‘Indira Vikas Patra’ and ‘Kisan Vikas Patra’ are in accordance with the norms and modes specified in section 11(5) of the Income-tax Act.
Circular : No. 566, dated 17-7-1990.