Although many tax benefits are available in the Post Office Monthly Income Scheme, there is also tax on it.
Post Office Monthly Income Scheme: The time for filing income tax returns is going on. In such a situation, you have many investments on which different tax rules apply. There is one such well-known scheme of the post office, which comes under the ambit of tax. However, you also get many types of discounts on this. Although many tax benefits are available in the Post Office Monthly Income Scheme, there is also tax on it.
In this small savings scheme, you can plan investment for every month’s income. For those having a single account, a maximum of Rs 9 lakh can be invested in it 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.
What is Post Office Monthly Income Scheme (POMIS)?
POMIS 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.
Tax 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, that is, you have to pay tax on it. When you file income tax return, 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. So if you have invested in this scheme and are earning interest every month, then do not forget to show it in your income tax return.
