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Income from other source

22 November 2018

Interest on Post office time deposits taxable or not ?
And if taxable ,is there any exemption ?

Further in Case of MP this interest would be taxable or not ??

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24 Replies

Hitesh (Student) (3549 Points)
Replied 22 November 2018

Taxable but you get exemption u/s 10(15)....

Jaisika Kukreja (216 Points)
Replied 22 November 2018

10(15) exemption is for Post Office Saving Scheme n m talking about Post office time deposits ??

Hitesh (Student) (3549 Points)
Replied 22 November 2018

ok then there are allowed as deduction under 80C

Jaisika Kukreja (216 Points)
Replied 22 November 2018

but it is not taxable according to my study material

Jaspreet Singh (17 Points)
Replied 22 November 2018

interest on post office term deposit is as good as your normal FD interest, hence it is taxable.

Jaisika Kukreja (216 Points)
Replied 22 November 2018

Is there any exemption for MP (Member of Parliament) ?

Jaspreet Singh (17 Points)
Replied 22 November 2018

No, on this particular income, no exemption exists.

Nitesh bind (Student CA Final ) (12692 Points)
Replied 22 November 2018

See, when you deposit in post office time deposit (POTD) it's principal amount would be allowed as Deduction u/s 80C if maturity period is above 5 years.

Interest amount would be fully Taxable but if received by Senior Citizen it is exempt u/s 80TTB Upto Rs. 50,000.

TDS:

Post office would deduct TDS on interest paid. y it. In case of Senior Citizen if there is amount of interest payable exceeding the above said limit of Rs. 50,000 then TDS under Section 194-A @ 10%. Although you have to show income under Other sources in any case and then claim the TDS from your Gross tax liability.

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raja sekar (1435 Points)
Replied 22 November 2018

Income from Post Office Term Deposit is treated as Fixed Deposit. If it is for 5 years term then it is exempt u/s80c. Though the interest amount at the time of maturity is calculated as income in the hands of the depositor.

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Jaisika Kukreja (216 Points)
Replied 22 November 2018

but in my study mat. interest on cumulative time deposits in post office ....whether exempted or not taxable i.e it is not considered ??

Nitesh bind (Student CA Final ) (12692 Points)
Replied 22 November 2018

See, As far as CS study material as I earlier said you once that there might be mistakes crept in that that has been happened so many time (as I'm a CA finalist so in our syllabus too we have seen many mistakes).

As far as Cumulation is concerned in POTD interest it is generally cumulated quarterly but still Interest would have to been yearly and has to be offered for tax.

Suggestion:

Do remember that there is allowed Deduction u/s 80TTB ONLY FOR SENIOR CITIZEN Upto Rs 50,000 of interest.

2 Like