Post Office Monthly Income Scheme Tax Rule: If you want a fixed fixed income every month, then you can invest in Post Office Scheme (POMIS), but along with this you should also know the tax rules. Let us understand it in detail.
One of the most popular investment schemes of Post Office is Monthly Income Scheme. This is a government supported Small Savings Scheme, in which investment can be planned for every month’s income. For those with a single account, a maximum of Rs 9 lakh can be invested and for a joint account, a maximum of Rs 15 lakh can be invested. If you want a fixed fixed income every month, then you can invest in this scheme, but along with this you should also know the tax rules (Post Office Monthly Income Scheme Tax Rule). Let us understand it in detail.
What is Post Office Monthly Income Scheme (POMIS)?
This is a type of term deposit account, on which you get interest every month. You can invest a fixed amount in it and then get fixed income every month with interest. Investment period is 5 years. Currently you get interest at the rate of 7.40%, this is added to your deposit every month. In this scheme, minimum deposit can be made in multiples of Rs 1,000 and maximum Rs 1,000. A maximum of Rs 9 lakh can be invested through single account, Rs 15 lakh for joint account, minors of 10 years and above can invest up to Rs 3 lakh.
What are the tax rules on Post Office Monthly Income Scheme?
You get more tax benefits on this small savings scheme. There is no wealth tax on this. TDS (tax deducted at source) or tax rebate is not applicable on this scheme, nor does it come under Section 80C of the Income Tax Act, in which you get a direct benefit of Rs 1.5 lakh.
In this scheme, the interest you get on your deposit is taxable income, that is, you have to pay tax on it. When you file income tax return (ITR Filling), you have to show the income from it in the ‘Income from Other Sources’ category. You will have to pay tax on the interest income earned from this scheme as per the income tax slab applicable on your total income.
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