Dear Sir,
Jammu and Kashmir Bank offers many beneficial schemes for the public. People are always looking for the safest way to invest, to get guaranteed return without risk.
However, the Term Deposit Receipt commonly called Cash Certificate (CC) Scheme offers different attractive interest rates for different periods ranging from 6 months, 1 year, 10 etc. In general, in this scheme (CC) the sum is kept up to a particular term till the end of maturity.
After maturity on due date cash certificate is withdrawn, if customer do not want to renew it, the bank will credit the Principal amount alongwith interest to the depositor’s account by presenting the original cash certificate to the bank for withdrawal. Bank provides 0.5% more interest in favour of senior citizen.
Pertinent to mention, at the time of credit the total amount, the bank deducts ‘Tax’ as per tax laws to the customer. Since the interest income earned on cash certificate, bank considered it income from other source, therefore charges it under tax (Tax Deduction at Source TDC). It is fully taxable as per tax laws as described by J&K Bank Corporate office.
I visited customer cell of JK Bank and they said that if the interest income earned is Rs.40,000 annual, 10% Tax (TDS) in deducted if pan card of customer is linked with bank otherwise 20% tax (TDS) is deducted (FY 2024 – 25 till March 2025 tax laws).
The GRIEVANCE:
Customer’s grievance is that there is no awareness from bank side prior to investment on cash certificate nor is there any public notice board for awareness about the scheme. There is no TDS calculations in tabulated form nor counselling cell in J&K bank offices for customers who could have availed the facility for more clarity.
Pertinently, to mention Bank earns crores of rupees of interest annually used by the government for development works while bank lacks so many facets itself. In Sumbal Sonawari Sub Div. JK Bank’s all offices are in rented building since long. It is strange to say, banks had given advance rent to the owners for construction of 2nd, 3rd storey on rented buildings for office purpose. What can they actually do for clients.
It is observed that some bank employees are either unaware or haven’t time or courtesy to explain nuances of schemes to its clients and as a result confusion occurs and several people suffer. Bank officials often state that they have to only switch on the tax deduction at source (TDS percentage) on computer system as per tax laws and rest of the amount is automatically credited to customer’s account depends on his/her willingness to withdraw it or renew the cash certificate.
It is therefore requested to the respected Chairman of the J&K Bank that we want justice as we have investment and the whole retirement benefits on cash certificates in order to get better returns but fear losses due to tax (TDS).
Pensioners appeal to the authorities of RBI that functioning of J&K may please be revived with regard to cash certificate scheme that tax (TDS) should not be applied to pension employees because the amount which they invest on cash certificate to get better returns is actually their retirement benefits and is already taxable, e.g. computation pension, in general A govt. employee commute up 40% of their basic pension because of poverty and needs for domestic use, this reduces the monthly pension also, and this reduced portion is restored after 15 years from the date of receiving the commutation pension, it is used for medical emergencies, house, marriage of children etc.
Thanks
Abdul Majid Mir
A retired Govt. employee and a pensioner
