Dear Readers
We are introducing a column, wherein your questions and queries regarding any kind of financial matter pertaining to Banking, financial markets, taxation and insurance will be replied by a Certified Financial Planner. You can send your questions on the email address: and

Question:  My mother who died recently was maintaining a Saving Bank Account with a branch of State Bank of India . At the time of her death, the account had a balance of Rs.1.45 lakh. Being the only son of my parents, I approached the said bank for payment of this amount to me. The bank, however, did not make the required payment and instead asked me to get a succession certificate for ascertaining  actual legal heirs. Kindly let me know , whether in terms of the prevailing rules , it is necessary for me to have a legal succession certificate for claiming such a small sum from a bank.

Answer: Before , I answer your question , I would like to inform you for the benefit of all the readers that all banks provide the facility of  “nomination” in all kinds of accounts and in terms of RBI guidelines , all banks are necessarily supposed to ensure obtaining of nominations at the time of opening of accounts unless specifically opted by the customer for not availing the facility. It needs to be understood that by having the facility of nomination, the nominee does not have any right on the amount of money held in such accounts during the life time of the account holder and it is also not necessary for the account holder to inform the nominee in this regard, as his presence or his signatures are not required.
After the death of the account holder, transfer of money from the deceased account into the account of the nominee is a smooth and simple process, which is completed within a few minutes. It is therefore necessary that every one should ensure that he has used the facility of nomination in all his bank accounts. In your case , I presume that the deceased mother of yours had not made any nomination in the said Saving account .
It is therefore necessary for the bank officials to satisfy themselves about the payment of balance in the deceased account being made to the rightful legal heirs only and the most reliable method to carry it  on the basis of a legal succession certificate issued by a competent authority.
However, it is not necessary for the bank to do so and there are specific amount wise powers at the level of various bank officials to pay claims in deceased accounts without insisting for legal succession certificates. In your case , the amount under claim being not too big, it should be within the powers of the Branch Manager only to pay this claim amount without a legal succession certificate . You would however, have to satisfy the bank officials about your being the only legal heir of the deceased. I would therefore advise you to meet the branch Manager in person and explain your position to him in detail and satisfy him about your bonafides as the only legal heir of the deceased . I am confident that he would agree and would not insist for the legal certificate.

Question: I have been working for a leading private company for the last one year. My monthly gross salary is Rs.34000/- , out of which Rs.1700/ is deducted every month as my provident fund contribution. Till date I have not paid any income tax. Now my employer has not disbursed my salary for the month of February and has asked me to pay the income tax. They have calculated an amount of about Rs.16500/- as the income tax due from me and they are deducting this amount from my salary. Kindly let me know whether I have to pay this tax or there is some method to seek an exemption from payment of this tax.

Answer: In terms of the prevailing rates, in case of an individual, income up to Rs.2.50 lakh is exempt from income tax and for incomes beyond that amount up to five lakh income tax is charged at the rate of 10% and at the rate of 20% for amounts beyond that up to 10 lakh, with a further educational cess of 3% on the tax payable as such. In case of incomes up to 5 lakh , there is however, a relief of 10% in tax payable subject to a maximum of Rs 2000. In your case the total gross yearly income is Rs.4.08 lakh and in terms of guidelines therefore qualifies for income tax at the rate of 10% beyond Rs.2.50 lakh. Thus you need to pay income tax at the rate of 10% on an amount of Rs. 1.58 lakh, which will amount to Rs.15800/- . After adding the educational cess at the rate of 3% and deducting the general exemption of Rs.2000/- , the net income tax payable by you for the financial year amounts to Rs.14274/- . Since you have contributed an amount of Rs.20400/- to provident fund during the year , you will get exemption for this amount at the rate of 20% which will be Rs.4080/- . Therefore the net tax payable by you is Rs.10194/- . You can however get an exemption from payment of this amount also, if you invest an amount of Rs.50970/-  in any of the specified schemes as per the Income Tax rules. I would also like to add that amount if any spent by you towards payment of tution fee of two of your children would also qualify for exemption from payment of the tax.

Question: I am a non resident Indian , presently working in Oman. In one of your answers during the last week you had written about the National Pension Scheme which has been made applicable to non residents also . Kindly let me know as to how I can open such an account immediately?

Answer: Whenever you come to India , you can approach any public sector bank for opening of this account . However, you can also open this account online without having the hassle of coming to India and walking into a bank branch, if you have a  Non resident account with a bank branch here and also have a PAN card or Aadhar Card . You need to visit the web site of National Pension system which is  and fill up all the mandatory details online along with scanning and uploading of your photograph and signature.
If you are doing the registration on the basis of Aadhar card, you will not need to upload the photograph and signature. After registering , you will have to make a minimum initial online contribution of Rs. Five Hundred only. 12 digit permanent number will be generated online. Then the form is required to be printed and signed besides affixing the photograph . The form is then to be sent to the Central Record keeping Agency which is NSDL.

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