Small Savings Schemes: Who Will Get Money If Account Holder Dies Without Nomination? Check Here
The new amendment in the Finance Bill 2023 added another option to secure eligibility to receive the fund and extended the tenure to claim funds with specified documents
The Finance Bill 2023 has proposed amendment to the Government Savings Promotion Act, of 1873 clearing doubts on who will get money if the small savings scheme account holder dies without nomination. The new amendment also added another option to secure eligibility to receive the fund and extended the tenure to claim funds with specified documents besides increasing the accountability of the authorized officer in charge of handing over the funds.
The Government Savings Promotion Act, of 1873 covers several schemes from Public Provident Fund, Sukanya Samriddhi, Senior Citizens Savings Scheme to National Savings Certificate.
Check schemes covered under Government Savings Promotion Act 1873:
Post Office Savings Account
National Savings Monthly Income Account
National Savings Recurring Deposit
Sukanya Samridhhi Account
National Savings Time Deposit (1 year, 2 years, 3 years and 5 years)
Senior Citizens‘ Savings Scheme
Kisan Vikas Patra (discontinued from 1st December, 2011 and restarted from 23rd September, 2014);
National Savings Certificates (VIII Issue).
Public Provident Fund Scheme
What were the existing provisions?
The existing provisions of the Government Savings Promotion Act 1873 said in case a depositor dies without a nomination in force, the authorised officer is liable to pay the balance deposit to any person entitled to receive the balance amount and appearing before her if probate of the will or letters of administration of the estate of the deceased person or a succession certificate granted under the Indian Succession Act, 1925 is not produced to the authorised officer within three months of the depositor's death, publication Economic Times quoted Shri Venkatesh, Managing Partner, SKV Law Offices, as saying .
What does the new amendment say?
The Finance Bill 2023 has proposed an amendment to Section 4A of the Government Savings Promotion Act 1873, which states that:
“If a depositor dies and no nomination is in force at the time of his death, and the probate of his will or letters of administration of an estate or a succession certificate granted under the Indian Succession Act, 1925, or legal heir certificate issued by the revenue authority, not below the rank of Tahsildar having jurisdiction, is not produced within six months from the date of death of the depositor to the Authorised Officer, then, where the eligible balance does not exceed such limit as may be prescribed, the Authorised Officer may, for reasons to be recorded in writing, pay the eligible balance to the person legally entitled to receive it or to administer the estate of the deceased in accordance with such procedure and manner as may be prescribed.”
Going by the proposed amendment, the payment of the available balance in the account will be made to the person legally entitled to receive it if the accountholder dies without declaring his nominee.
The amendment has indicated that government will later notify the limit and the eligible amount.
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