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‡ Assured savings scheme for the self employed

‡ Tax free returns of 8% p.a.

± Review of the ³Exempt, Exempt, Exempt (EEE)´ regime may change this scenario

‡ Eligible investors
± Individuals (whether or not salaried)
± NRIs who opened accounts before they became NRIs (can continue contribution till
maturity ± no extension)

‡ Investors not eligible

± Companies, partnership firms, trust, local authority, etc.
± HUF, AOP, BOI (recent exclusion ± hence, can continue existing accounts till
maturity but no fresh investment)
± NRIs (other than as described above)

‡ Only one account per person (across locations)

± Individual can open an account in the name of his/her spouse and children

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‡ Maximum investment ± Rs. 70,000 p.a; minimum ± Rs. 500/- p.a.
± PPF limit for investment u/s 80C remains Rs. 70,000

‡ Interest calculated on the lowest balance between close of the fifth day and last day of
the month

‡ Not subject to attachment under order or decree of a court. However, can be attached
by IT authorities to recover dues

‡ Tenure
± Base tenure ± 15 years
± Can be continued for a block of 5 years on maturity with or without contribution
± If continued without contribution for a year, will continue as is for the rest of the term
± If continued with fresh subscription, upto 60% of the balance at the beginning of the
extended period can be withdrawn in one or more installments but not more than
one a year

© 2003 Accenture. All Rights Reserved. 2

 


    
‡ Say, account opening year: 2001-02

‡ Maturity year = end 2002 + 15 = 2017 (01 Apr 2017)

‡ Withdrawals
± Can start from the 7th year
± For instance first withdrawal in end 2002 + 6 = 2007 ± 08
± First withdrawal amount = 50% of lower of the two balances:
‡ 4 years preceding Mar 2008 = Mar 2004
‡ 1 year preceding Mar 2008 = Mar 2007

‡ Loans
± Can start from the 3rd year
± For instance first loan in end 2002 + 2 = 2004 (2003-04)
± For loan taken in 2003-04, amount = 25% of balance at the end of the Mar ¶02
± For loan taken in 2004-05 amount = 25% of balance at the end of the Mar ¶03
± No loan possible after 2006-07
± Repayable in 36 months
± Interest rate
‡ First 36 months ±
‡ Thereafter ±

© 2003 Accenture. All Rights Reserved. 3

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‡ Fixed income securities issued by Department of Posts, Government of India

‡ Duration ± 6 years

‡ Denominations ± Rs. 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000

‡ Transferable between individuals and between post offices

‡ Can be pledged for a loan with permission of the post master

‡ Premature encashment possible 3 years from date of purchase

‡ Rate ± 8% pa compounded half yearly

‡ Principal contribution and interest reinvested eligible for deduction u/s 80C; interest
taxable
± Prior to introduction of Section 80C, interest income was deductible u/s 80L

‡ Tax saving / ELSS funds are proving more attractive from a returns and liquidity
perspective

© 2003 Accenture. All Rights Reserved. 4

 


 


‡ Duration ± 5 years, extendible by 3 years

‡ Amount ± Minimum ± Rs. 1,000; maximum ± Rs. 15,00,000

± For retirees, subject to a cap of retirement benefits

‡ Entry criteria
± Retirees± 55 years or above; account to be opened within 3 months of retirement
± Non retirees± 60 years or above

‡ Returns ± 9% taxable; interest paid quarterly

‡ Premature termination
± After first year but before completion of 2 years ± 1.5% of deposit to be deducted
± On or after 2 years ± 1% of deposit to be deducted
± If account extended (after 5 years), account can be closed a year after the extension
for no additional cost

© 2003 Accenture. All Rights Reserved. 5

 


 


‡ Other features
± Non tradable and non transferable
± NRIs and HUFs not eligible to invest
± Accounts to be opened through post office
± Joint accounts can be opened; joint holder need not be a senior citizen
± Amount less than Rs. 1 lakh can be deposited in cash
± Multiple accounts can be opened subject to the overall ceiling
± PAN number mandated, else self declaration that income does not exceed
exemption limit

© 2003 Accenture. All Rights Reserved. 6