(1) Every compulsory deposit made by or recovered from a depositor shall carry simple interest at a rate equal to the bank deposit rate.
Compul- Mry deposit to carry simple interest.
Explanation.—In this sub-section "bank deposit rate" means tne hiPhest of the maximum rates at which interest may be paid on different classes of deposits (other than those maintained in savings account or those maintained bv charitable or religious institutions) by different classes of scheduled banks in accordance with the directions given or issued to banking companies generally bv the Reserve "Rank nf India under the Banking Regulation Act, 1949. lOof 104y.
(2) The interest shall be calculated in such manner as may be sper pified in the scheme framed under section 13.
SEC. 1] THE GAZETTE OF INDIA EXTRAORDINARY 491 (?) For the purposes of the deduction under section 80L of the Income-tax Act, interest received on a compulsory deposit shall be deemed to be interest received on a deposit with a banking company to which the Banking Regulation Act, 194JJ, applies.10 of 1949.
8. The amount of compulsory deposit made by or recovered from a depositor in any financial year shall be repayable in five equal annual instalments commencing from the expiry of two years from the end of that financial year, together with the interest due on the whole or, as the case may be, part of the amount of the compulsory deposit which has remained unnaid:
Repayment of compulsory deposit.
Provided that nothing in this section shall prevent earlier repayment of the deposit or any instalment thereof together with the interest due in any case in which the Income-tax Officer is satisfied that extreme hardship will be caused unless such repayment is made.
9. Every depositor shall send to the Income-tax Officer, along with the return of income for the assessment year for which he is liable to make a compulsory deposit, proof of the fact of such deposit having been made.
Intimation regarding compulsory deposit.