Deposit Limits for Self-Accounts and Minor Accounts Explained

Understanding the Limits on Deposits in Self-Account and Minor Accounts

Under Rule 3 (1) of the Scheme, the maximum allowable deposit for an individual within a given year is Rs. 1,50,000. This limit applies both to an individual's self-account and accounts held on behalf of minors for whom the individual serves as guardian.

Separate Limits for Other Entities

Additionally, as specified in Rule 3 (2) of the Scheme, this deposit limit is distinct for accounts opened by Hindu Undivided Families (HUFs), associations of persons, or bodies of individuals.

Consequences of Excess Contributions

If a subscriber exceeds the deposit limit of Rs. 1,50,000 in a given year, any contributions surpassing this amount will be classified as irregular subscriptions. Key points to note about these excess deposits are:

• They will not accrue any interest.
• They will not qualify for tax rebate under Section 80C of the Income Tax Act.
• The excess amount will be refunded to the subscriber by the Accounts Office without interest.

For further details, please refer to the communication from the MOF (DEA) and the correspondence from N.S.C. Nagpur.

By ensuring compliance with these regulations, subscribers can optimize their savings while understanding the implications of exceeding prescribed limits.