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 this in detail.
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One of the most popular investment schemes of the post office is the Monthly Income Scheme. This is a government-backed small savings scheme, in which you can plan investments for monthly income. Those with a single account can invest up to a maximum of Rs 9 lakh and those with a joint account can invest up to a maximum of Rs 15 lakh. 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’s 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. By putting a fixed amount in it, you can then get fixed income every month with interest. The investment period is 5 years. Currently, you get interest at the rate of 7.40% on this, which is added to your deposit every month. The minimum deposit in this scheme is Rs 1,000 and the maximum deposit can be made in multiples of Rs 1,000. A maximum of Rs 9 lakh can be invested through a single account, Rs 15 lakh for a joint account, and 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.
The interest you get on your deposit in this scheme 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 earned from this in the ‘Income from Other Sources’ category. You will have to pay tax on the interest earned from this scheme as per the income tax slab applicable on your total income.
