In todays scenario, where we observed various frauds related to banks, in such situation many people & mainly senior citizens are moving towards post office for secure their hard core money. Though the rate of interest is sometimes little less but the security and trust with post office is very high in the market.
At the same time, many people are under wrong impression that the interest earned from post office saving bank account is fully exempt in the hands of receiver. Which is not true at all. Hence today I am writing this short and simple article just to enlighten all the readers who are under this wrong impression regarding interest earned on post office saving bank account.
The core reason of this confusion in the minds of people is due to various amendments with respect to taxation of interest of post office saving bank account. Earlier it is fully exempt u/s 10(15)(i) vide notification no. G.S.R. 607(E) dated 9 June 1989. Then the said notification is amended in 2011 to provide partial exemption i.e. upto Rs 3,500.
Currently, the interest from post office saving bank account is 1st taxable under income from other sources and then eligible for deduction u/s 80TTA upto Rs 10,000 for person other than senior citizen and deduction u/s 80TTB upto Rs 50,000 alongwith other saving bank account interest. And whatever will be the amount of interest over and above that deduction will be taxable in the hand of the receiver.
I hope the above clarification will help you to understand the tax perspective with respect to interest earned on post office saving bank account.
Disclaimer: The contents of this article are for information purposes only and does not constitute advice or a legal opinion and are personal views of the author. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc before acting on the basis of the above write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that Author / TaxGuru is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof. This is not any kind of advertisement or solicitation of work by a professional.
(Republished with Amendments by Team Taxguru)
Post office saving account
Me kya Rd account or MIS account me bhi section 10(15) me exemption milegi kya
Or mam ye bhi bataye ki agar post office me agar husband or wife ka joint MIS account ho to usse Milne wala monthly interest kiske hands me taxable hoga
Please confirm that post office savings interest for a senior citizen has only exemption of 50000 under section 80TTB, and no additional exemption of 3500 under 10(10)1.
Has the 10(10)1 been discontinued.
There are different versions on this which is confusing.
Rs3500/Rs 7000 exemption on interest earned from post office savings account is inclusive in Rs 50000 of interest earned and exempted from income tax under 80 TTB. If it is separate, then how it is to be claimed in income tax return.
Chennai Anna Nagar HPO is not effecting TDS even when Interest exceeds the exempted limit and 15H is not submitted on Fds & RDs either paid or accrued.
There is still some confusion. Has the notification of 2011 allowing exemption of post office savng a/c interest of Rs.3500/- been withdrawn or is it still available u/s 10(15) in addition to deductions u/s 80TTB?
This was not required to be republshed because now Sec 80TTB has also been introduced for Senior Citizens.
Interest received from post office MIS on joint a/c, whether it is a income of 1st holder or 2nd holder ?
What if the interest received in the month of April2011 – will it be exempt for the said month since the notification is applicable from June