Post Office Savings Schemes Tax: Post office RD, FD, MIS and other savings schemes are safe for investors, but not the scheme is tax-free. Some schemes have TDS. They do not get tax exemption.
Post office schemes tax rules: The post office savings schemes have always been popular among investors. Whether it is to save tax or get safe returns, people invest money in these schemes. But do you know that not every scheme is completely tax-free. Taxes are also deducted on interest received in some schemes. This is called tax deduction on sources. Let us understand in easy language, how much tax has to be paid on which scheme of the post office?
Why and when does TDS cut in the post office?
If you are investing in the post office and the annual interest is more than a few limits, then the government deducts tax. This is called TDS deduction. According to the new rules applicable from 1 April 2025, if the annual interest for ordinary citizens is more than Rs 50,000, the TDS will be deducted. TDS will be charged at an annual interest of more than Rs 1 lakh for senior citizens. This limit of TDS applies to the annual total interest and helps prevent tax evasion.
National Savings Recurring Deposit (RD)
In RD, you deposit a little amount every month. If your annual interest exceeds Rs 50,000, the post office will deduct TDS. But if there is less than the limit, there will be no tax.
Senior Citizen Savings Scheme (SCSS)
People above 60 years can invest in SCSS. In this scheme, TDS is deducted at more than Rs 1,00,000 annually. Tax benefits are received under Income Tax Section 80C on deposits up to Rs 15 lakh.
National Savings Certificate and Farmers Development Patra
The National Savings Certificate i.e. the interest received in NSC does not cost TDS. There is also a tax exemption under 80C on deposits up to Rs 15 lakh. At the same time, annual interest in Kisan Vikas Patra (KVP) is completely taxable. If the interest limit crosses 50,000 or 1 lakh rupees, the TDS will be deducted.
Monthly Income Scheme (MIS) and FD
The interest received every month in MIS is also taxable. TDS deducts when going above the annual interest limit. At the same time, tax savings are available under 80C on 5 -year post office fixed deposit (FD). But if one, two, three -year -old FDS or interest limit crosses, TDS will be imposed.
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