Law: Income Tax Act, 1961

Section: 6,7,8

Income-tax---National savings certificate---Nomination---Effect---Upon death of holder, nominee entitled to receive sum under certificate without proof of title---But retains such sum for benefit of persons entitled under law of succession---Indian Government Savings Certificates Act, 1959, - Ss.6, 7 & 8. The object of section 6 of the Government Savings Certificates Act, 1959, which provides for the making of nomination., by holders of certificates, is to avoid the delay and expense involved in production of legal proof of succession, by enabling holders of savings certificates to nominate one or more persons to receive the amounts due in respect of such certificates in the event of their death without the production of succession certificate or other proof of title. Though the nominee of National Savings Certificates has a right to be paid the sum due on such savings certificates after the death of the holder, yet he retains the said amount for the benefit of the persons who are entitled to it under the law of succession, applicable in the case, however, subject to, the exception of deductions mentioned in subsection (2) of section 8. Any amount paid to the nominee after valid deductions becomes the estate of the deceased. Such an estate devolves upon all persons who are entitled to succession under law, custom or testament of the deceased holder. The nominee who becomes entitled to the payment of the amount on account of National Savings Certificate received by him under section 6 read with section 7 of the Act, in turn is liable to return the amount to those in whose, favour law creates beneficial interest, subject to the provisions of subsection (2) of section 8 of the Act. Sint. Sarbati Devi v. Sint. Usha Devi (1984) 55 Comp. Cas. 214 (SC) applied. Atmaram Mohanlal Panchal v. Gunvatiben alias Geetaben AIR 1977 Guj. 134; (1978) 48 Comp. Cas. 250 (Guj.); Fauja Singh (S.) v. Kuldip Singh AIR 1978 Del. 276; Karuppa Gounder v. Palaniammal AIR 1963 Mad. 245; Kesari Devi v. Dharma Devi (1963) 33 Comp. Cas. 93 (All.); Lakshmi Amma v. Saguna Bhagath (1973) ILR Kar. 827; Life Insurance Corporation of India v. United Bank of India Ltd. (1971) 41 Comp. Cas. 603…

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