Kolkata: Senior citizens have now been assured of no TDS (tax deducted at source) by CBDT (Central Board of Direct Taxes) that there will be no tax deduction at source when they withdraw from NSS accounts and this will be applicable to NSS withdrawals on or after April 4, 2025. The CBDT notification followed confusion prevailing among senior citizens about the matter. While placing her Budget in 2025, finance minister Nirmala stated no TDS will be allowed on NSS withdrawals made on or after August 29, 2024.
The announcement will benefit those above 60, many of whom are still holding on to the NSS accounts — specifically which no longer generate interest payment. They can now withdraw their money without any TDS incidence. Therefore, they will get the full amount in hand. These NSS accounts were discontinued way back in 2022 and last year the government even stopped paying interest. Now that TDS has been withdrawn, senior citizens will find it beneficial to shift the funds to MIS in post office and/or Senior Citizen Savings Account.
If TDS already deducted
It is important to note that if any senior citizen has already suffered TDS while withdrawing NSS funds despite being eligible for TDS exemption, they can claim refund while filing ITR. But reports point out that refund claims will be admitted only if the total tax liability is less than the TDS.
Which NSS were discontinued
NSS stand for National Savings Scheme which were introduced by the government for the proliferation of instruments for long-term, safe investments. However, NSS-87 and NSS-92 were discontinued. NSS-87 was withdrawn in 1992 which allowed only one withdrawal each year and NSS-92 was discontinued in 2002, which allowed limitless withdrawals. 2002 was the last year when any NSS accounts were opened.
The Senior Citizen Savings Account also comes under the NSS umbrella. It pays an annual rate of 8.2% interest, one of the highest in the country with a sovereign guarantee. One can put a maximum of Rs 30 lakh in this account along with his/her spouse.
The Central Board of Direct Taxes has dispelled a confusion in many senior citizens on whether they will be subjected to tax deducted at source if they withdraw funds from their legacy NSS instruments. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
