The Indian Post Office offers a diverse range of investment schemes that assure guaranteed returns. Backed by the government, these schemes ensure the safety of your deposit. Among these, the Post Office Monthly Income Scheme is a renowned option that pays out interest on a monthly basis.
If you are considering investing in this scheme, it is essential to understand the Post Office Monthly Income Scheme tax benefits and other key features. This will help you make an informed investment decision.
To know the meaning, features, and benefits associated with the scheme, read on.
The Post Office Monthly Income Scheme (MIS) is an investment program recognised by the Ministry of Finance. This scheme enables you to deposit a specific amount and receive a fixed monthly interest payout.
It is a low-risk investment scheme that offers a consistent source of income while safeguarding your capital. You have the flexibility to invest up to ₹9 Lakhs individually or ₹15 Lakhs jointly. The investment term for this scheme is 5 years. The interest rate for the period of April to June is 7.40% per annum, with monthly interest payouts.
Learning the Post Office MIS tax benefits and rules before investing is key. Your deposits in the Post Office Monthly Income Scheme enjoy an exemption from Wealth Tax. It is essential to note that your investment is not covered under Section 80C of the Income Tax Act, and the Tax Deducted at Source (TDS) or any tax rebate is not applicable.
It is important to note that the TDS is only deducted on interest earnings exceeding ₹40,000. The TDS is deducted on interest earnings of more than ₹50,000 for senior citizens.
The interest that you receive from this scheme is subject to taxation. To ensure compliance with tax regulations, you must declare the interest income under the ‘Income from Other Sources’ category when filing your income tax.
Note that you need to pay the applicable income tax on your interest earnings as per the income tax slab that applies to you.
You can choose to open multiple accounts, but the total deposits in an individual account cannot exceed ₹9 Lakhs. You can also open a joint account with a maximum of 3 people. The maximum investment limit in a joint account is ₹15 Lakhs.
You can also open a minor account for your child above the age of 10 years. They can withdraw the amount at the age of 18 years.
You get the option to nominate a family member as a beneficiary to your Post Office MIS account. In the unfortunate event of death, the nominee can claim the benefits and corpus.
As you can see, the Post Office Monthly Income Scheme stands out as a secure investment option that provides guaranteed returns. This option is ideal if you are an investor who prioritises safety and desires a steady monthly income flow.
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Each joint account holder of the Post office MIS scheme has an equal share in the joint account.
Yes, the Post Office MIS scheme offers several benefits to senior citizens. It is a safe investment option that offers monthly interest payouts. This provides a stable monthly income stream that you can use to cover your monthly expenses or save your earnings for unplanned expenses.
Yes, you can convert your individual post office MIS account into a joint account. You can also convert a joint account into an individual account.
Yes, you can easily transfer your Post Office MIS account to any post office in India at no additional cost.