Now Income Proof is mandatory for Rs 10 Lakh investment in Small Saving Schemes
Investments in small savings schemes have become quite appealing due to relatively high-interest rates without credit risk. The government has decided to maintain a closer eye on those who take part in money laundering and terrorist financing. The Government Department of Posts has directed post office officials to collect income proofs from investors of small savings schemes investing more than Rs 10 lakh. The department announced these changes through a circular issued on May 25, 2023. The circular is issued due to the changes in Know Your Customer (KYC) norms. According to the Circular, the customers who have accounts with India Post are divided into three risk categories: low, medium, and high risk. Low Risk: Investing in or holding certificates with a maturity value of up to Rs 50,000 or having a balance in savings accounts that does not exceed Rs 50,000 falls under the low-risk category. Medium Risk: Those whose investments range from Rs 50,000 to Rs 10 lakh fall under the medium-risk group.
High Risk: Those who invest or keep investments worth more than Rs 10 lakh fall under the high-risk category of investors. The accounts relating to Politically Exposed Persons (PEPs) residing outside India are also categorised under fall under High-Risk Category. As per the circular, it is mandatory for the customer to submit a copy of a document showing the source of receipts of funds for making investments in Indian Post. Any of the following documents can be submitted as proof of the source of funds:
Any one of the income tax returns filed during the last three financial years
Sale deed/Gift deed/Will/Letter of Administration/succession certificate
Any other document which reflects the source of the fund
Bank/Post Office Account statement, which reflects the source of funds
All types of customers/investors (regardless of their risk categories) are required to present the following documents in order to complete the investment:
Address proof: Aadhaar number, PAN, passport, driving license, Voter’s ID Card, Utility bills (not older than two months) etc.
Photograph: 2 recent passport-size photographs, 3 in the case of BO. In the case of a joint account, a photograph of all joint holders should be given
ID proof: Aadhaar and PAN
Existing India Post depositors who haven't already done so must submit their Aadhaar before September 30, 2023. If they haven't already, they must provide their PAN within two months of meeting any of the following criteria:
when any account's balance reaches Rs. 50,000;
when all of the account's credits total more than Rs. 1 lakh in a fiscal year; or
when a transfer to or withdrawal from it exceeds Rs. 10,000 in a given month
If the depositor fails to provide the mandatory proof within the time period, the account will be deactivated. The reporting of cash transactions worth Rs. 10 lahks or more will be done by the postal authorities.
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