Cheques with overwriting can be returned

As per I-T guidelines,TDS is to be paid on interest income on term deposits if total interest income during a financial year exceeds R10,000. Since,your interest income is R5,000 per year; it is exempted from the TDS.

Can banks charge fee for online transactions and how much is usually charged?

-Suraj Asthana

Yes,banks can charge fee for online transactions and this may vary according to transaction type and amount. For example,any transaction through NEFT national electronic funds transfer for an amount up to R1 lakh will attract a fee of R5. Banks may also charge for online payment on certain gateways,like IRCTC. However,some online transaction like intra-bank transfers are free of charge.

I want to open a demat account and buy few shares of some blue chip companies. Do I have to pay any charges to the bank every year and how much would a bank charge?

-DP Kohli

You can open your demat account with a depository participant DP. Some banks also act as depository participants. For opening a demat account,no fee is chargeable. However,DPs have their own fee structure for services rendered by them to the investors,like pledge creation,remat of shares and transaction fees. DPs are free to charge an annual maintenance fee as decided by them. For example,Union Bank of India charges an annual maintenance fee of R350 for individual demat account holders.

I want to take some loan from a bank by pledging some gold. How does the system work and how safe is it to pledge gold?

-Pramod Gopalan

Customers of bank can avail loans against pledge of gold ornaments and jewellery. Loans are sanctioned for various purposes like agriculture or for general needs. Pledging gold is safe and is kept under dual custody in individual sealed pouches in safes meant for the purpose. Banks also take general insurance cover for the pledged gold. The pledged gold shall be returned to you on full and final payment of loan with interest. Gold loan creates monetary value for the customer.

Can a bank return a cheque if there is any overwriting?

-Pratima Kumari

Overwriting on the cheque is valid if it is signed by the account holder. However,as per recent RBI guidelines,overwriting on cheques is not valid for cheques cleared under the image-based cheque truncation system which is currently operational in Delhi and will be implemented across India in future. In such cases,cheque with overwriting will be returned to the customers.

The author is executive director,Union Bank of India

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