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Taxable or exempted income

TRILOCHAN (SENIOR ACCOUNTANT) (698 Points)

12 September 2011

Respected All,

Interest from post office MIS Scheme is taxable or not

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Digambar (Senior Accountant) (23 Points)
Replied 12 September 2011

Interest rate of 8% per annum payable monthly.
Maturity period is 6 years.
Minimum investment amount is Rs.1000/- or in multiple thereof.
Maximum amount is Rs. 3 lacs in single account and Rs. 6 lacs in a joint account.
Account can be opened by an individual, two/three adults jointly and a minor through a guardian.
A minor having attained 10 years of age can open an account in his/her own name directly.
Non-Resident Indian / HUF cannot open the Account.
Minor has a separate limit of investment of Rs. 3 lacs and the same is not clubbed with the limit of guardian.
A separate account is opened for each deposit.
Any number of accounts can be opened subject to the maximum prescribed limit.
Facility of automatic credit of monthly interest to saving account if accounts are at the same post office.
Facility of premature closure of account after one year @ 3.50% discount.
No deduction of 3.5% if account is closed on completion of three years.
Facility of reinvestment on maturity of an account.
Interest not with-drawan does not carry any interest.
Maturity proceeds not drawn are eligible to saving account interest rate for a maximum period of two years.
Account is transferable from one post office to any Post office in India free of cost.
Nomination facility available.
Rebate under section 80 C not admissible.
Interest income is taxable, but no TDS
Only scheme in Post office where monthly interest is payable.
Most suitable scheme for senior citizens and for those who need regular monthly income.
Deposits are exempt from Wealth Tax

CA Leanne Santos (CA) (39 Points)
Replied 12 September 2011

Interest from Post Office MIS Scheme is Taxable

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