1. 122 TAXMAN (ST.) 20

AMENDMENT TO RELIEF BONDS

The Central Government vide notification no. F- 4(5) - w&m/2002 dated 28/2/2002 amends the scheme of 8.5% Relief Bonds 2001.

The Amendment are as follows:
1. With effect from 1/3/2002 the bond will bear interest at the rate of 8% p.a. instead of 8.5% p.a.
2. The maximum limit for investment in the bonds shall be Rs. 2,00,000/- p.a.
3. With effect from 1/3/2002 the scheme will be known as 8% Relief Bonds 2002.

2. 254 ITR (ST.) 303

FURTHER CLARIFICATION REGARDING INTEREST ON RELIEF BONDS. PRESS NOTE 21-3-2002.

Press Note dated 21/3/2002 gives the following clarifications.
(a) The ceiling of Rs. 2 lac will not apply to those who have purchased relief bond prior to 1/3/2002 and yet to mature. Such bond holders will continue to earn the contracted rate of interest till the date of maturity.
(b) The Relief Bonds, which are matured but not encashed will continue to earn past maturity interest of 8% p.a. upto 31/3/2002.
(c) Matured bonds remaining unencashed upto value Rs. 2 lac will continue to earn past maturity interest at 8% p.a. even after March 2002.

3. 122 TAXMAN (ST.) 21

RELAXATION FOR RETIRED EMPLOYEES UNDER 8% RELIEF BONDS, 2002

The Government of India vide notification no. F- 4(5)- w&m/2002 dated 22/4/2002 amends the earlier notification dated 28/2/2002.

The limit of Rs. 2 lac p.a. per investor will not apply to investments made by retiring employees including those retiring under voluntary retirement schemes of the government public sector banks, local bodies and private sector out of their retirement/terminal benefit which include

(a) balance of the credit of Employee in any of the Provident Funds,
(b) retirement/superannuation gratuity,
(c) commuted value of pension,
(d) cash equivalent of leave, and
(e) savings element of Government Insurance Scheme payable to the employee on retirement.

The investment is required to be made within 3 months from the date of receipt of retirement benefits. In case the retirement benefits is disbursed on different dates, the period of 3 months is to be counted from the date of full and final settlement.

Such Investor will have to produce a certificate from the employer that the funds being invested by the retiring employee are retirement terminal benefits received by him/her on retirement / under voluntary retirement scheme.

Incase reinvestment to be made by already retired employees of the government public sector etc. of the maturity proceeds of the Relief Bonds initially purchased out of their retirement / terminal benefits/ voluntary retirement scheme compensations. In such cases the reinvestment

should be made within 3 months from the date of issue of this notification or date of maturity/ encashment of the bond whichever is later.

Such investor will have to produce a affidavit that the funds initially invested by him/her in Relief bonds were out of the retirement/terminal benefits/ voluntary retirement scheme compensation. The above entitlement for retirement / terminal benefit is in addition to the annual limit of Rs. 2 lac per investor otherwise available for investment / retirement / matured bonds.

4. 121 TAXMAN (ST.) 272

PRESS NOTE FOR PROPOSED RATE OF DEPRECIATION ON PLANT & MACHINERY

The CBDT has proposed amendments to rates at which depreciation on certain items of plant and machinery is to be made admissible from the assessment year 2003-2004 including books owned by professionals. Besides, it has brought down maximum rate of Depreciation @60% p.a. from present rate of 100% and an Intangibe assets from 25% to 15%.

5. 174 ITR (ST.) 4

SPECIFICATION OF NEW JEEVAN DHARA AND NEW AKSHAY PLANS OF LIC AS THE ANNUITY PLAN FOR THE PURPOSE OF SECTION 88(2) (XIIIA) OF INCOME TAX ACT.

The Central Government vide notification no. 71 dated 2/4/2002 has specified the New Jeevan Dhara and New Akshay Plans of the Life Insurance Corporation of India as the annuity plans of LIC for the purpose of section 88(2) (xiiia) of Income Tax Act.

6. 121 TAXMAN (ST.) 271

ADDITIONAL CRITERIA FOR NOTIFYING ELIGIBLE PROJECT OR SCHEME FOR PROMOTION OF SOCIAL & ECONOMIC WELFARE FOR THE PURPOSE OF RECOMMENDATION TO CENTRAL GOVERNMENT BY NATIONAL COMMITTEE (RULE 11K - INSERTION OF ITEM (q) & (r)).
Notification no. 70/2002 dated 1/4/2002 inserts the following two items being "(q) & (r ) to rule 11K of Income Tax Rules for the purpose of recommending a project or scheme by National Committee to Central Government for notifying eligible project or scheme for promotion of social and economic welfare.
(q) plantation of softwood on degraded non forest land,
(r) any programme of conservation of natural resources or of afforestation.

7. 254 ITR (ST.) 279

CORRIGENDA TO THE CBDT CIRCULAR CONCERNING SECTION 14A OF INCOME TAX ACT.

CBDT circular no. 14 dated 12/12/2001 clarifies that its earlier direction, under circular no. 11 of 23/7/2001 relating to reopening u/s 147 of completed assessment as on 1.4.2001 by applying the provisions of 14A of the Income Tax Act, were issued within its power to issue beneficial circular u/s 119(2)(a) of Income Tax Act.

8. 122 TAXMAN (ST.) 33

THE FINANCE ACT, 2002
The Finance Act, 2002 was given assent by the President on 11.5.2002. It gives relevant text of the act to give effect to the finance proposal contained in Budget 2002 of the Central Government for the financial year 2002-2003.

9. "SUVIDHA" SCHEME FOR BULK FILING OF RETURNS BY SALARIED EMPLOYEES

The Central Board of Direct Taxes has framed a scheme called "SUVIDHA". It's a scheme for bulk filing of returns by a salaried employee. It is effective from 1/7/2001. It applies to Ahamadabad, Bangalore, Baroda, Bhopal, Chennai, Delhi, Gandhi Nagar, Haidrabad, Jaipur, Jabalpur, Kolkata, Mumbai, Pune & Thane or such other cities as may be notified.

For detailed draft provision of the scheme, one may referr to the notification.

10. 122 TAXMAN ( PART 2 )
INTEREST RATES ON SMALL SAVINGS SCHEMES INCLUDING PUBLIC PROVIDENT FUND AND DEPOSITS SCHEME FOR RETIRING EMPLOYEES REDUCED WITH EFFECT FROM 1/3/2002.

The Interest rates on most Small Savings Instruments and PPF are being revised downwards by 0.5 per cent. The changes will be effective from 1/3/2002. The table below details the rates of interest effective from1/3/2002.

Sl. No.	Small savings schemes	Rates of Interests (%)
1.	Post Office Time Deposit 1 year	7.25
2.	Post Office Time Deposit 2 year	7.50
3.	Post Office Time Deposit 3 year	8.25
4.	Post Office Time Deposit 5 year	8.50
5.	Post Office Recurring Deposit 5 year	Amount repayable on an account of Rs.10 denomination on maturity Rs.748.49
6.	National Savings Certificates VIII Issue	Amount inclusive of interest, payable on certificate of Rs.100 denomination at maturity: Rs.169.59.
7.	National Savings Scheme, 1992	8.5
8.	Kisan Vikas Patra	Doubling in 7 years 8 months
9.	Post Office Monthly Income Account	9.0
10.	Public Provident Fund 15 years	9.0
11.	Deposit Scheme for retiring Government / PSU employees.	8.0

11. SPECIFIED DEBENTURES/BONDS ISSUED BY PUBLIC SECTOR COMPANIES, ELIGIBLE FOR EXEMPTION U/S 10(15) (iv) (h) OF INCOME TAX ACT.
The Central Government specifies the following bonds being eligible for exemption u/s 10 (15) (iv) (h) of Income Tax Act. The Notification may be referred for specific categories of the bonds and distinctive number thereo

Ref.	Notification No.	Date	Name of Security	Name of Period	Institution
254 ITR (ST.) 324	31(c)	7/1/2002	8.25% Hudco Tax Free Bonds of Rs. 1 lac.	HUDCO	10 Years
121 Taxman(ST.) 265	61	19/3/2002	7.5% Tax Free Bonds of National Housing Board Swarna Jayanti Rural Housing Finance	National Housing Board	10 Years

12. SPORTS ASSOCIATION/ INSTITUTION NOTIFIED U/S 10 (23) OF INCOME TAX ACT.

The Central Government has notified the following Institutions being eligible for exemption u/s 10 (23) of I.T.Act.

Ref.	Notification No.	Notification Date	Name of Institution	For & From the Assessment Year
121 Taxman (ST.) 269	67/2002	20/3/2002	Maharashtra State Basket Ball Association Matunga, Mumbai	1999-2000
121 Taxman (ST.) 258	53/2002	25/2/2002	National Rifle Association	1994-95 to 1996-97

13. PRESS NOTES - INCOME TAX RETURN FORMS FOR NON-CORPORATE TAXPAYERS FOR ASSESSMENT YEAR 2002-2003.

I PRESS NOTE DATE 5/6/2002
Inview of representation from various quarters about the complication involved in filing return, the Finance Minister has permitted small tax payers being non-corporate taxpayers where total Income for assessment year 2002-2003 is upto Rs. 2.00 lac to submit the return in old form No. 2D Saral.

Press Notes further states that person filing return in Form No. 2 and Form No. 3 need not furnish the general information as specified in the forms.

II PRESS NOTE DATED 7/6/2002
After the announcement vide press note date 5/6/2002 with regard to Income Return Forms for non- corporate taxpayers, the matter was reconsidered and it was decided that the all eligible non-corporate taxpayers will have an option either to file their return of Income in the old Form No. 2D 'Saral' or in Form No. 2 and Form No. 3, as the case may be.

14. RELAXATION OF DOCUMENTATION REQUIREMENT FOR VALUATION OF PERQUISITES U/R 3 OF INCOME TAX RULES

Inview of representation made by the various associations as regard the difficulties in document requirements to be maintained by the employee & employer; the CBDT proposes to modify the rules under which either the onus of the documentation requirement may be placed on to the employer only or alternatively a system of adhoc percentage may be introduced.

Response was invited from the public on changed draft rules which was placed on website of the Ministry of Finance and comment were invited to be sent by e-mail to dirtpl2@finance.nic.in.

The present Income Tax Rule 3 requires the documentation and various details to be maintained by the employer and further supported by the requisite certificate from employee and Supervising Authority of the employee. Now relaxation is proposed where by requirement of certificate to be given by employee and supervising authority of the employee is done awaywith and the requisite details is now to be maintained by the employer and the certificate from him that the employee has incurred the expenditure wholly and exclusively for the performance of office duties.