• Jun
  • 13
  • 2011

Interest up to Rs 3500 in Post Office Savings Exempted from Income Tax

Article ID 41915 | Posted In Income Tax | , | 10 Comments » Print Friendly and PDF

Section 10(15)(i) of the Income-tax Act, 1961 – Exemptions – Income by way of interest, etc. , on bonds, securities – Specification of bonds, securities , etc., issued by Central Government – Amendment in Notification No.G.S.R. 607(E), dated 9-6-1989

Interest up to Rs 3500 in Post Office Savings Exempted from Income Tax – As per sub-clause (i) of clause (15) of Section 10 of the Income Tax Act, income by way of interest (among certain other incomes) will not form part of taxable income, if notified by the Government and subject to conditions in the notification.Government had notified vide number G.S.R. 607(E), dated the 9th June, 1989, certain securities, bonds etc, for this purpose. As per Sl. No. 9 of the table to this notification, interest from Post Office Savings Bank Account was not to be computed as income. Now, this is amended to restrict the exemption to interest up to Rs. 3500/- for individual account and Rs. 7000 in the case of joint account.

Section 10(15)(i) Of The Income-Tax Act, 1961 – Exemptions – Income By Way Of Interest, Etc. , On Bonds, Securities – Specification Of Bonds, Securities , Etc., Issued By Central Government – Amendment In Notification No. G.S.R. 607(E), Dated 9-6-1989

Notification No. 32/2011[F.No.173/13/2011-Ita.I] /S.O.1296(E), Dated 3-6-2011

In exercise of the powers conferred by sub-clause (i) of clause (15) of section 10 of the Income-tax Act, 1961 (43 of 1961) the Central Government hereby makes the following amendment to the notification of the Government of India in the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S.R. 607(E), dated the 9th June, 1989, namely :—

In the said notification, in the Table, for serial number 9 and the entries relating thereto, the following serial number and entries shall be substituted, namely :—

1                     2
3
“9. Post Office Savings Bank Account
To an extent of the interest of Rs. 3,500 in the case of an individual account and Rs. 7,000 in the case of joint account”

2. This notification shall come into force from the date of its publication in the Official Gazette.


  • ROSHAN

    Dear Sir,
    please tell me that which types of income from post office is exempt from income tax
    and also those sections

  • javed shaikh

    Dear Sir,

    good evening!!!

    Please clarify .. deduction in post office saving account is exempted up to 3500 and also their is one more deduction u/s 80 TTA of saving account interest of Rs 10000, Which one to take??

  • Parul goyal

    Is sumone have joint account with sum person along with having individual account too then,the amount of exemption of intrest on postal saving will be?
    Please clear my doubt!!
    thanq

  • Benny

    Please let me know the tax benefits availble for the Post office saving deposits.

  • Anand

    Hellow Sir,

    This 3500/- excemption applies to Savings Bank Account(SB Accounts in Banks) as well?

    Are interest gained from SB accounts in Bank are also taxable?

    Thanks,
    Anand

    • Deepak D Bhat

      Notification No.G.S.R. 607(E), dated 9-6-1989 allowed POST OFFICE SAVING ACCOUNT Interest as exempt u/s 10(15)(i)

      Sec 10(15)(i) states that ” Income by way of interest , premium on redemption or other payment on securities , bonds , annuity certificates , savings certificates or other certificates issued by central govt or by NOTIFICATION subject to condt. & limits as may be specified therein ”

      The above notification is now revised as follows :
      Notification No. 32/2011[F.No.173/13/2011-Ita.I] /S.O.1296(E), Dated 3-6-2011
      Post Office Savings Bank Account

      To an extent of the interest of Rs. 3,500 in the case of an individual account and Rs. 7,000 in the case of joint account”

      In all the other interest earned by the person will be taxable.

    • Bishal Mandal

      Post office Savings Bank Interest is exempt upto 3500 for singal a/c and 7000 for joint a/c. Anything more than 3500/7000 will be elligible for dedution u/s 80TTA

  • SARIKA

    whether rhis exemmption is both for RD as well as MIS

  • ISHER KUMAR ARORA

    Thanks Sir, for notification regarding interest upto Rs.7000.00 p.a. in Post office savings exempted from I.Tax.(in case of jointed a/c). Sir, pl clarify whether this exemption will also apply to MIS.

    Thanks& Regards,

    Isher Kumar Arora

    • Satya Paul Goyal

      As per Notification interest from ‘Post Office Savings Bank’ A/c is exempt