Why Post Offices not deducting TDS on Post Office TD, RD, MIS Interest for General Public ?. When I checked with the Post Office they confirmed that they will accept Form 15H from Senior CItizens & Form 15G from Defence Retired people (who are also eligible for Senior Citizens Savings Scheme Account(SCSS)). They are not asking the general Public to submit Form15G for not deducting TDS. Otherwords, they neither accept Form 15G nor deduct TDS on Interest Payout / Credit from General Public. Is there any exemption for Post Office for not deducting TDS ? If so, please mention that also.
Why Post Offices not deducting TDS on Post Office TD, RD, MIS Interest for General Public ?
Replies (2)
Quick Summary
Post office investment schemes on which TDS is not deducted ......
Public Provident Fund Account (PPF) PPF deposits qualify for a tax benefit under Section 80C of the Income Tax Act. The interest earned is tax-free, and TDS is not applicable.
National Savings Certificates (NSC) NSC deposits up to Rs. 1.5 lakhs are eligible for a tax benefit under Section 80C. The interest earned on NSC is not subject to TDS.
Kisan Vikas Patra (KVP) The returns are totally taxable because KVP is not eligible for 80C deductions. TDS, however, is not applied to withdrawals made after the scheme's maturity.
Mahila Samman Savings Certificate TDS is to be deducted on interest generated for more than Rs 50,000 per year for senior citizens and Rs 40,000 for ordinary residents under the Mahila Samman Savings Certificate.
Senior Citizen Savings Scheme (SCSS) Deposits in the Senior Citizen Savings Scheme (SCSS) are tax-deductible under Section 80C. TDS is levied on interest generated in excess of Rs 50,000 per annum.
Post Office Monthly Income Scheme Account (MIS) Interest is taxable, and there is no deduction under Section 80C for deposits made. TDS will be deducted on interest earned beyond Rs 40,000, and Rs 50,000 for senior citizens.
Post offices are required to deduct TDS on TD, RD, MIS and SCSS interest, but only above the threshold:
• Sec 194A covers interest on deposits under notified Post Office schemes. The threshold (from 1 April 2025) is Rs 50,000 a year per post office for general depositors, and Rs 1 lakh for senior citizens. Below that, no TDS is deducted, which is why most general depositors see none.
• Form 15G (below 60 with nil tax liability) is available to everyone who meets its conditions, not only defence pensioners. Form 15H is for senior citizens. Post offices accept both.
• No TDS does not mean tax-free. Post office TD, RD and MIS interest is fully taxable (only POSB savings interest is partly exempt under Sec 10(15)). It appears in AIS, so report it under "Other Sources" on accrual basis.
• Seniors can claim deduction under Sec 80TTB (up to Rs 50,000, old regime).
• Interest on PPF, SSY and NSC reinvestment years is not subject to TDS.
• From 1 April 2026, TDS is under Sec 393 of the Income-tax Act, 2025.
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