 the compulsory deposit scheme bill, :1963a bill to provide in the interest of national economic development for compulsory deposit and for the framing of a scheme in relgtion thereto bb it enacted by parliament in the fourteenth year of the republic of india as follows:-1 (1) this act may be called the compulsory depollt scheme shan_  act, 1963 uledt 1114 eommen-(2) it extends to the whole of india mmt 5 (3) it shall come into force on such date as the central government may, by notification in the ofticial gazette, appoint 2 this act shall apply to the following categories of persona, penom til namely :-whom a- (a) persons liable to payment of land-revenue under anyapplla 10 law with respect to land-revenue whether or not such persona are liable to pay tax under the income-tax act; (b) persons liable to payment of tax und~ the income-tax act; (c) holders of immovable properties situated in urban areaa assessed to tax (whether known as property tax, houle tax or by any other name); (d) employees of-(i) the central and state governmenta, (ii) local authorities, (iii) companies as defined in section 3 of the compani_ act, 1956, including government companies as defined ijl section 617 of that act, (iv) any othe~ corporation (including a co-operative society) established by or under a central, provincial or state act, whose annual income from salary is one thousand five hundred rupees or more and who are not liable to payment of tu udder the inqome-tax act;  i'l81(b) ls-l (e) shopkeepers whose annual turnover, determined in accordance with the provisions of any law with respect to tax on the sale of goods, is fifteen thousand rupees or more and who are not liable to payment of tax under the income-tax act; (f) persons other than shopkeepers liable to payment of 5 taxes on professions, trades, callings or employments under any jinr ~tll respect to the same but not liable to pa,,_t ~  under the income-tax act; (g) such other categories of persons [than those referred to til olawjel (a) to (i)] whose annual income is one thouiadd·" 10 l'mftdlied rtjijees or more and who are not liable to p81melit 01 tax under the income-tax act, as may be specified by the centtal 'government by notification in tht: ofbclal gazette 3 in th1a act, unlesa the context otherwise requjrel,-(a) "additional surcharge" means additional surchar  fo  15 the purposes of the union referred to in the annual finance act; (b) "deposit" means a deposit of money; (c) "income-tax act" means the income-tax act, 1961, 41 of 118l (d) "person" does not include a body of persona; (e) "salary" has the same meaning as in section 17 of the 20 lticotne!·:tax act, but in relation to a person falling under clause (ci) of section ~ goes not include any gratuity; (j) "shopkeeper" means a person carrying on any retail trade or business in any premises; (g) "urban area" me  any area within the local limits of 2s a jadieipalit7 (bj whatever name called), a notified area 00dlm1ttee, a town area committee, a city and town commitwe, - small town committee, a cantonment board or a panchayat and having a population of ten thousand or more 1 ~' requirementasto compul-~t 4 (1) as from such date as the central government may, by 30 notiftcafloh in the oftltial gazette, appoint in this behalf, every person tu hotn this act applies, other than a person fallitjg'· under clause (b) of section 2, shall make a compullloi'y depos1t at sueh rate - as may be provided for iii a scheme framed uncler this ad: provided that different notifications may be issued under this sub- 3s sec~on on different dates in relation to different categories of persons: pnmded further ~bat the rate of compu18ory depo1dt ilwl not exceed the maximum rate ipeclfted in sub-aectlod (i) - (2) tht mqim\ujl rate of deposit mall be-(a) in the case of a person falling under clause (4) 01 seqtion ·2, any per cent of the land-revenue payable for the ,ear lq09-11) in respect of the land or lands held by him in tuy4w' in which the deposit is required to be made; (b) in the ~ase of a person falling under clause (c) of that section, three per cent of the annual rental value oftha pre-perty with reference to which the property is all8e88ed to the tax referred to in that clause in the year in which the depoltt 10 is required to be made: provided that where the property is assessed to such tax with reference to the estimated value thereof or with reference to ~y otaer standard, the maximum rate of deposit under this clause shall be three per cent of the annual rent at whidl that is property might reasonably be expected to let fr()ljl year to y,eerj (c) in the case of a person falling under clause (d) of that $ection, three per cent of his annual income from salary; (d) in the cale of a person fauing under clause (e) of ~t 1iection, one-third of one per cent of his tw'llgver quring  the 20 year immediately preceding the year in which 'the depotit is required to be made; (e) in the case of a person falling under clause <t) of that section, an amount equal to the amount of the tax ·on his profession, trade, calling or employment payable by him during the as year in which the deposit is required to be made; <f) in the case of a person falling under clause (g) of that section, a sum of sixty rupees per annum {il) a person falling under clause (b) ()f section 2 bywhom any additional surcharge is payable in respect of any assessment tr_r 30 may make a deposit under this act in respect of that year edd if he does so, then, he shall, on production of proof before the inc~)ll)e-tax officer concerned of the fact of such deposit having been j;nacle, be entitled to deduction from the adcutional surch&:rge af a bam wbi~h shall be equal to-3s {ei) the swn 80 deposited • or {b) (i) wher~ his residual ineomeis ·,ix tbo~·rupenor less, three per cent of such residual incenae, « (ii) where his residual inc::ome ~¥c~ sixtbqumj¥i ~pe8l, three per cent of the first six tho\ls8nd fllpe,s pl8uch r~1hlal  ad lllcome and two per cent of the balellqethe~~f ,, ,  wbichevet' is 1  - e:rplanation-in this sub-section "residual income" has the same meaning as in section 2 of the finance act, 1963 (4) any person falling under clause (b) of section 2 who is in receipt of any income under the head "salaries" during any financial year may make a deposit under this act in that year and if he does 5 so, then, notwithstanding anything in the income-tax act, the person responsible for paying that income shall, on production of proof of the fact of such deposit having been made, reduce the amount of additional surcharge included in the tax to be deducted in accordance with the provisions of section 192 of that act by a sum which 10 ihall be equal to-(a) the sum so deposited, or (b) the sum calculated in accordance with clause (b) of subaectiod (3), whichever is less 15 (5) any person falling under clause (b) of section 2 who is liable to pay advance tax under the income-tax act in any financial year may make a deposit under this act in that year and if he does so, then, notwithstanding anything contained in the income-tax act, he shall, on production of proof before the income-tax officer concerned 20 of the fact of such deposit having been made, be entitled to deduction from the additional surcharge included in the advance tax, of a sum which shall be equal to-(a) the sum so deposited, or (b) the sum calculated in accordance with clause (b) of sub- 25 section (3), whichever is less  !xplanation-in this sub-section, "advance tax" shall have the lame meaning as in section 207 of the income-tax act (6) where any person falls under any two or more categories 30 referred to in section 2 other than the category referred to in clause (b) of that section, then, he shall make a compulsory deposit at the rate applicable to each of those categories (7) any deposit made under this section shall bear simple interest at the rate of four per cent per annum and notwithstanding anything 35 ill the income-tax act, the amount of such interest shall be free of any tax under that act  - (8) any deposit made under this section during any year shall be repayable with interest thereon at any time after the expiry of five years from the end of the year in which the deposit bas been 40 ~:  provided $hat nothing in this sub-section shall prevent earlier repayment of any deposit with interest thereon in the event of the death of the depositor if the authority empowered to make such repayment is satisfied that genuine hardship will be caused unless s such repayment is made (9) if any doubt or dispute arises as to tire amount to be deposited by any person under this act or as to the date on which such amount is to be deposited or as to any other matter in relation to any deposit ~o be made under this act, the decision thereon of the government or 10 any authority empowered by the government in this behalf shall be ftnal 5 (1) the central government shall, by notification in the official compulsory gazette, frame one or more scheme or schemes to be called compul- deposit sory deposit scheme or schemes in relation to deposits under this scheme is act (2) a scheme framed under sub-section (1) may provide for,-(a) the rates at which and the period for which compulsory deposits shall be made by the several categories of persons to whom this act applies and the extension of such period; (b) the manner (including the deduction of deposits at source) in which and the intervals at which such deposits shall be made;  (c) the documents· to be issued to persons by whom deposits have been made as evidence of such deposits; (d) the authority or authorities by or through whom deposits may be collected; (e) the accounts to be maintained with respect to such deposits and the officers by whom such accounts shall be maintained; (f) the nomination of any person to receive the amount standing to the credit of a depositor in the event of his death and the cancellation or change of such nomination; 30 (g) the issue of duplicate of any document issued as evidence of any deposit in the event of loss or destruction of the original and the fee on the payment of which such duplicate may be issued; 3s (h) the repayment and withdrawal of deposits with int~rest thereon and the conditions, if any, under which such repayment or withdrawal may be made; (i) any other matter which may be necessary or proper for the effective implementation of the scheme 40 6 the central government may, by notification in the official modiftea-gazette, add ~ amend or vary any scheme framed udder this act ~ - roundidi off , where 'the amount of any deposit to be made \lnder this act eontainsa part of a rupee, then, if such part is ftfty naye paise or more, it shall be increased to one complete rupee and if such part is·less the ·ftfty naye paise, it shall be ignorect protection against attachment • (1) the amount standing to the credit of any depositor shall not s be liable to attachment under any decree or order of any court in respect of any debt or liability incurred by the depositor (2) any amount standing to the credit of a depositor at the time of his death and payable to his nominee under a scheme shall vest in the nominee and shall be free from any debt or other liability 10 incurred by the dmehed or iacurnd  b:v the i'lomidee before the deati! of the depdlitor ~t7ter t (1) if any person who is liable to make a deposit underltais ~~ to act fails to make the same within the time specified therefor, he ,ball d~t be liable to pay by way of penalty an amount equal to the amount 15 of deposit w'bich he is liable to make: provided  that  before levying any such penalty such person shall be given a reasonable opporiuaity of being heard in respect of the same (2) where any company or other corporation referred to in :0 clause (d) of section 2 is responsible for paying any income falling udder the head ""salaries" as mentioned in the income-tax act, then, notwithstanding anything in that act, in computing the total income of that company or other corporation under that act for any assessmeat year commencing on or after the 1st day of april, 1984, no as deduction shall be allowed in respect of payment of any income under that head which in the case of any employee exceeds one thousand five hundred rupees but from which no tax is deductable under the heading lib-deduction at source" in chapter xvii of that act uniess a sum equal to the amount which such employee is 30 tequired to depesitunder this act is deducted from such income at 801uce and is deposited in accordance with the provisions of this act and the scheme framed thereunder 11 luy an8m' of depesit8dcl an, penlty fer 'failure to make such deposit under this act shall bencofti"abie in· fihe 1j8me manner 3' nl an arreu ofjuul1:e~ lleeo  er"j' otarrearll of deposit and - penalt7 protectiojl 11 no suit, prosecution or other legal proceedings shall lie against of action tabilka ,,per,n-for~g which ja·tn good·faltb··done 1)1' intended to goad , mf48ae wiler iwa act soi'aay _eme 'fnmeci tben!under faitl , - - 11 any scheine framed under this act &bali be iaid, as ioon  &:heme to fuay be, after it is framed before each house of parliament while it t:f~d the is in session for a total period of thirty days which may be comprised ~:'~ of in one session or itt two or more successive sessions, and if before ment s the expiry of that session in which it is so laid 01' the aeniolt or hllidn idtmediate1y followldg both houses apee ill makiaa any modification in ani1 provision of the scheme or both houses agree tlaat ~ provilion ia 1111& scbeme should not be macie, the provision of ihe scheme hall tilaeafter have eftect oii1y in· such mociuied form 10 or be of no efieet,  the clue may be, 10 however that my 1ucb· ldijdifldaticm or aaulment shall de without prejudice to the validit1 ot ~, ptmoualy done tmclerrthat provisiod the object of the bill is to augment the resources of the nation for national development wjth this object in view the bill requires certain categories of persons to deposit a portion of their income in accordance with schemes to be framed for the purpose subject to the maximum rates of deposit specified in the bill itself, the schemes will lay down the actual rates at which the deposits shall be made the schemes will also make detailed provisions in relation to the deposits the deposits will bear interest at the rate of four per cent per annum and will be repayable at the end of five years  new delhi; morarjidesai  the 28th februa1'j/, 1963 financial memorandumthe scheme of compulsory deposits is proposed to be operated through the existing agencies of the central and state governments and the local authorities for this purpose, these agencies will have to be suitably strengthened in addition, in accordance with subclause (7) of clause 4 of the bill, interest at 4 per cent per annum on the deposits made under the scheme will also have to be paid at the time of the repayment of the deposits on the basis of an annual deposit of rs 65 to rs 70 crores, the additional cost on strengthening the existing administrative machinery is approximately estimated at rs 25 iakhs non-recurring and rs 50 lakha per annum recurring and rs 2 to 3 crores per umwn on account of interest charges 1782 cs) ~  memorandum regarding delegated legislationsub-clause (1) of clause 5 of the bill provides that the central government shall, by notification in the official gazette, frame one or more scheme or schemes to be called compulsory deposit scheme or schemes in relation to deposits under the act the various matters which among others may be provided for in a scheme have been specified in items (a) to (h) of sub-clause (2) of that clause the important matters in relat~on to deposits, such as the maximum rates of deposits, the rate of interest thereon and the period after which the deposits may be repaid or withdrawn have been provided for in the bill itself; the various matters which may be provided for in a scheme are matters of procedure and administrative detail it is hardly practicable to provide for all these matters of procedure and detail in the bill itself the delegation of legislative power 11 thus of a normal character  a billto provide in the interest of national economic development for compulsory deposit and for the framing of a scheme in relation thereto the president has in pursuance of clauses (i) and (3) of article ii7 of the constitution of india recommended to lok sabha the introduction and conaideration of the bill !ri n kaul, sec,ewy (shri m ora,ji desai minister of fina1lce1 