What changed
Previously, only the original SCSS investor could file Form 15-G or 15-H for TDS exemption. Now, after the depositor's death, the nominee can also submit Form 15-G at the time of interest payment to avoid tax deduction.
What it means for you
Banks handling SCSS accounts must accept Form 15-G from nominees of deceased depositors and ensure TDS is not deducted on interest payable to them. This reduces compliance burden for nominees and aligns with CBDT's clarification. Designated branches need to be informed and trained on this change.
What you must do
- Update internal guidelines to accept Form 15-G from nominees of deceased SCSS depositors.
- Train branch staff on processing Form 15-G for nominees at the time of interest payment.
- Communicate this circular to all designated branches handling SCSS accounts.
- Acknowledge receipt of this circular to RBI as instructed.
Who it affects
Banks handling SCSS accounts (SBI, State Bank of Indore, State Bank of Patiala, State Bank of Bikaner & Jaipur, State Bank of Travancore, State Bank of Hyderabad, State Bank of Mysore, Allahabad 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, ICICI Bank Ltd, Vijaya Bank, IDBI Ltd), Nominees of deceased SCSS depositors, Designated branches of listed banks
Can a nominee submit Form 15-G for TDS exemption on SCSS interest after the depositor's death?
Yes, per CBDT clarification dated May 14, 2009, nominees can produce Form 15-G at the time of interest payment to claim non-deduction of tax.
Which banks are covered by this circular?
All banks listed in the circular, including SBI and its associates, public sector banks like Bank of Baroda, Canara Bank, PNB, and private banks like ICICI Bank and IDBI.
What should banks do to comply with this change?
Banks must bring this to the notice of designated branches, update procedures to accept Form 15-G from nominees, and ensure TDS is not deducted when the form is submitted.