Apr 122018
 

Provisions in finance bill 2018 as to provident fund (Part 1 of chapter VIII):

AMENDMENTS TO THE GOVERNMENT SAVINGS BANKS ACT, 1873

Clause111. The provisions of this Part shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.

Clause 112. In the Government Savings Banks Act, 1873 (hereafter in this Part referred to as the principal Act), for the long title, the following shall be substituted, namely:––

“An Act to regulate and channelise the savings from general public into Government Savings Schemes.”

Clause 3A. (1) The Central Government may, by notification in the Official Gazette, frame new Savings Schemes or amend or discontinue existing Savings Schemes to promote household savings in the country.

Clause 131. After section 15 of the principal Act, the following shall be inserted, namely:––

“16. (1) The Government Savings Certificates Act, 1959 and the Public Provident Fund Act, 1968 are hereby repealed.

(2) Notwithstanding such repeal and without prejudice to the provisions contained in the General Clauses Act, 1897, with respect to repeals––

(a) anything done or any action taken or purported to have been done or taken, including any rule, notification, order or notice made or issued or any direction given under the repealed enactments shall be deemed to have been done or taken under the corresponding provisions of this Act;

(b) subject to the provisions of clause (a), any instrument executed or certificate issued, or anything done under or in pursuance of any repealed enactment shall, if is in force at the commencement of Part I of Chapter VIII of the Finance Act, 2018, continue to be in force in so far as it could have been executed, or issued or done under or in pursuance of such Part, shall have effect as if the same has been executed, issued or done under or in pursuance of the provisions contained in the aforesaid Part;

(c) all deposits made or accounts or certificates held under the repealed enactments shall be deemed to be deposits or holdings in the Savings Scheme made under the corresponding provisions of this Act; and

(d) any proceeding under the repealed enactments pending immediately before the commencement of Part I of Chapter VIII of the Finance Act, 2018 before any court shall, subject to the provisions of this Act, continue to be heard and disposed of by the said court.

(3) The repeal shall not prejudicially affect the interest of depositors who, before the commencement of Part I of Chapter VIII of the Finance Act, 2018, made deposits or were issued certificates or made contribution to any scheme under the repealed enactments.

Meaning of existing saving schemes that will converted into Government Savings Promotion Act, 1873:

  1. Post Office Savings Account
  2. National Savings Monthly Income (Account)
  3. National Savings Recurring Deposit
  4. Sukanya Samridhhi Account
  5. National Savings Time Deposit (1 year, 2 years, 3 years and 5 years)
  6. Senior Citizens’ Savings Scheme
  7. Savings Certificates:—
    • Kisan Vikas Patra (discontinued from 1st December, 2011 and restarted from 23rd September, 2014);
    • National Savings Certificates (VIII Issue).
  8. Public Provident Fund Scheme.

Discontinued Savings Schemes:

  1. National Savings Scheme, 1987
  2. National Savings Scheme, 1992
  3. Block Deposit Account
  4. Defence Savings Account
  5. Gift Coupons
  6. Cumulative Time Deposit Accounts:— (a) 5-year account (b) 10-year account (c) 15-year account
  7. 5-year Prize Bonds
  8. 5-year Premium Prize Bonds
  9. 5-year Compulsory Deposit Account Scheme, 1963
  10. 5-year Fixed Deposit Account
  11. 5-Year Cash Certificates
  12. 10-Year Defence Savings Certificates
  13. 12-Year National Savings Certificates
  14. 7-Year National Savings Certificates
  15. 5-Year National Savings Certificates
  16. 10-Year Treasury Savings Deposits Certificates
  17. 15-Year Annuity Certificates (I series)
  18. 10-Year National Plan Savings Certificates
  19. 10-Year Treasury Savings Deposits Certificates
  20. 12-Year National Plan Savings Certificates
  21. 15-Year Annuity Certificates (II series)
  22. 10-Year Defence Deposit Certificates
  23. 12-Year National Defence Certificates
  24. 10-Year National Savings Certificates (I-Issue)
  25. 7-Year National Savings Certificates (Il Issue)
  26. 7-Year National Savings Certificates (III-Issue)
  27. 7-Year National Savings Certificates (IV-Issue)
  28. 7-Year National Savings Certificates (V-Issue)
  29. 12-Year National Savings Annuity Certificates
  30. 5-Year National Development Bonds
  31. 6-Year National Savings Certificates (VI-Issue)
  32. 6-Year National Savings Certificates (VII-Issue)
  33. 10-Year Social Security Certificates
  34. Indira Vikas Patras
  35. 10-Year National Savings Certificates (IX Issue).

Impact analysis:

  1. All deposits under existing saving schemes will automatically converted into and come under the Government Savings Promotion Act, 1873.
  2. Interest of existing customers’ are not prejudicially hearted in terms of interest rates and deduction from taxable income in computing tax bills.
  3. However, PPF currently enjoys the freedom from court attachment (but not attachment under any order of income tax and estate duty authorities), i.e., the balance to the credit of a subscriber in his account is not subject to attachment under any order or decree of a court in respect of any debt or other liability incurred by him. This provision may not exist as the PPF Act itself is being repealed.
  4. Furhter, information about above investment does not reach automatically to income tax department via AIR but henceforth since these come under Government Savings Promotion Act and hence criteria based information of above investment will reach to income tax department.

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