Mr. Ramesh has deposited money under Capital Gain Accounts Scheme, 1988 during the FY 24-25 with State Bank of India. Mr. Ramesh has died on 30th…

CA Final · Direct Tax Laws and International Taxation · PYQS · May 2026
Mr. Ramesh has deposited money under Capital Gain Accounts Scheme, 1988 during the FY 24-25 with State Bank of India. Mr. Ramesh has died on 30th Sep. 2025. The Total Amount of Interest during the FY 25-26 was - 3,00,000 (which includes interest 1,50,000 upto 30th Sep. 2025), Discuss the TDS implications for the FY 25-26 assuming no declaration is filed under Rule 37BA(2).

Suggested Answer and Working Notes:

In case of deposits under the Capital Gains Accounts Scheme, 1988 where the depositor (Mr. Ramesh, in the present case) has died on 30th September 2025: (i) TDS on the interest income accrued of 1,50,000 for and up to the period of death of Mr. Ramesh i.e., from 1st April 2025 till 30th September 2025 is required to be deducted and reported against PAN of the depositor, and (ii) TDS on the interest income accrued of 1,50,000 for the period after the death of the depositor i.e., from 1st October, 2025 till 31st March 2026 is required to be deducted and reported against PAN of the legal heir, since no declaration is filed under Rule 37BA (2) that credit for tax deducted has to be given to another person.

Topics: Deduction, Collection and Recovery of Tax

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