Query 1]

I am a housewife and a senior citizen of 76 years of age. I am holding Kisan Vikas Patra in my name for total amount of Rs. 2,04,000/-. The amount was invested on 09-09-2003.

After completion of its total period of 8 years and 7 months, the maturity amount of Rs. 3,77,589/-, naturally represents interest which I understand is taxable.

I have no other source of income except interest on the bank fixed deposits. Yearly income from this source is Rs. 57,800/-. As this income always remained below exemption limit prescribed for the senior citizen, I have not filed income tax return up till now. Thus the combine income of the interest of Rs. 2,31,389/- from Kisan Vikas Patra i.e., Rs 1,73,589 + Rs. 57,800/- from bank fixed deposit will still remain below present exemption limit of Rs 2,50,000/-. I am holding a PAN card in my name.

I want to have your advice on the following points:

  1. Whether I can save payment of tax on interest from KVP on maturity date by producing declaration form, if any, prescribed by the post office requesting not to deduct tax at source as is done for interest on fixed deposits of bank?
  2. Whether this declaration form is available at the post office?
  3. Under which section of Income tax Act, can the above request be made?
  4. If there is no other way for saving tax, at which rate will the tax be deducted by the post office?
  5. Can I get a refund of tax so deducted from the income tax authorities on the basis of tax deduction certificate to be obtained from the post office? []


    1. You are a senior citizen and the tax payable on your income during the relevant assessment year is Nil. You can get the interest without deduction of tax at source by submitting the declaration in Form No. 15H. After timely submission of the Declaration form, the interest will be paid to you without deduction of Tax at Source.
    2. Normally, the declaration form is available with the Post Office/ Banks. If it is not available, it can be downloaded from
    3. The payment of interest can be done without TDS u/s 197A (1C) of the Income Tax Act-1961 read with Rule 29C(1A) of the Income Tax Rule-1962.
    4. If the payer inadvertently deducts the tax at source despite submission of Form No.15H, you can get the refund of the same. For this, you would be required to file the return of income and claim the refund of the TDS done.

Though your query is simple but it is carrying a significant tax planning message. Your income for the year under consideration is below the basic exemption limit even if the entire interest on KVP/FDR is included in the income at the time of maturity. You haven’t filed the income tax returns of earlier year for the reason that your income (including accrued interest) was below the basic exemption limit. It has not adversely affected you as your income for the current year, even after including the entire interest income, on KVP/FDR remains below the basic exemption limit.

Our readers having long term FD’s, KVP, etc are advised to file the return of income voluntarily even if their income is below the basic exemption limit just to show the interest accrual on yearly basis. Without the accrual of income shown in the return of income, it may not be accepted on yearly basis by the Assessing Officer.

Query 2]

I Purchased a 2 BHK Flat on 25/08/1986 from West Bengal Housing Board in Kolkata.

The purchase value of the flat was Rs. 1.411 Lacs. In 2008-09, I spent around Rs. 2.00 Lacs for renovation. Bills for the renovation are available with me.

On 31.10 2011 I sold that flat at a price of Rs. 7.70 Lacs. I shall be thankful if you kindly let me know my LTCG Tax liability. Secondly, I read in news paper after last budget that age limit of Senior Citizens has been brought down to 60 years from 65 years. Will you please confirm this? [Rathin]


  1. Computing LTCG:

    Cost Inflation Index (CII) for the relevant F.Y. 1986-87, 2008-09 & F.Y. 2011-12 are “140”, “582” & “785” respectively. The indexed cost of acquisition of the flat is Rs. 7.91 Lacs i.e., Rs. (Rs. 1.411 * 785/140) whereas indexed cost of improvement is Rs. 2.69 Lacs i.e., Rs. (Rs. 2.00 * 785/582). Long term capital Loss shall be Rs. 2.90 Lacs.
    As there is a loss, no LTCG liability would be there on you. You can carry forward the loss for set off in subsequent years (up to 8 years). For carry forward benefit, you should ensure to file the return of income within due date.
    [The LTCG calculation is based on the presumption that the Stamp Duty valuation of the property is not exceeding the actual sale price of Rs. 7.70 Lacs. If the Stamp Duty valuation is exceeding Rs. 7.70 Lacs, the LTCG would be required to be calculated by considering such higher valuation].

  2. The age for the purpose of recognizing the senior citizen has been reduced from 65 years to 60 years for the F.Y. 2011-12 by the Finance Act-2011.

Query 3]

I am working in a bank & have confusion with respect to Form No. 15G vis a vis Form No. 15H. I shall be thankful if you can clear the doubt as to when we should take form No. 15G & when to take form No. 15H. [lalit****]


  1. Form No. 15G is a declaration form for non senior citizens whereas Form No. 15H is for a senior citizen.
  2. In order to be eligible to furnish Form 15G, the non-senior citizen investor needs to fulfill the following two conditions:
    a) The final tax on his estimated total income computed as per the provisions of the Income Tax Act should be nil, and
    b) The aggregate of the interest etc. received during the financial year should not exceed the basic exemption slab.
    If both these conditions are satisfied, Form 15G may be furnished and the entire interest income can be paid without deduction of tax at source.
  3. In order to be eligible to furnish Form 15H, the senior citizen needs to fulfill just the first condition, i.e., the final tax on the assessee’s estimated total income should be nil. The second condition (as mentioned in (b) above) imposed for Form 15G is not applicable.

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