The Hindu Business Line : Senior citizens' saving scheme

The Finance Ministry's circular to the State Bank of India, directing TDS on the Senior Citizen's Savings Scheme, is a retrograde step. The scheme was introduced by the Finance Ministry in 2004 to alleviate the lot of senior citizens, who had already been deprived of helpful avenues in investment for their hard-earned funds. It was subject to TDS then, but now its introduction puts senior citizens into considerable hardship.

Assuming he is able to avail of the full ceiling of Rs 15 lakh at 9 per cent interest per annum, his annual interest earnings will be reduced by as much as Rs 13,500, no small amount. Submission of form 15H for exemption from TDS is of no help, if he has marginal income from his other savings, which automatically precludes him from submitting this form. It may even push him into higher tax slabs. He then has to claim refund of this TDS amount, which is a herculean task. What the Ministry had given with the right hand, it has taken way with the left.

The Ministry must, therefore, abolish TDS on this scheme, particularly for those above the 65 years.

K. P. Mahalingam

Chennai

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