Post Office Savings Account Information, Post Office Savings Account | Have a savings account with post office? Know the rules of tax exemption, is there a savings account in the post office? Know the rules of tax exemption
Post Office (Photo – istock)
- Like banks, you can open a savings account in the post office.
- You can also avail tax exemption on interest income received from Post Office Savings Account.
- Know in detail below what are the tax exemption rules for post office savings accounts.
Apart from fixed deposits, small savings schemes are the safest option among the risk free avenues to invest. The interest rates of small savings schemes like post office savings accounts are updated every quarter. The government has kept the interest rate fixed for small savings schemes for the July-September quarter. Like banks, one can open a savings account in a post office to meet emergency or urgent financial needs. But do you know the tax exemption rules for post office savings accounts and how much tax you can save.
Post Office Savings Account Tax Exemption Rules
However, it is well known that a person can deduct tax up to Rs 10,000 under section 80TTA from interest income received from post office savings account. A depositor can also claim interest as tax free income from a post office savings account while seeking tax benefits under section 80TTA. Consequently, section 10(15)(i) of the Income Tax Act allows you to claim interest as tax free income from a post office savings account.
As per a government announcement dated June 3, 2011, interest in post office savings account up to Rs.3,500 for single accounts and up to Rs.7,000 for joint accounts is tax-free. The notification said that to the extent of interest of Rs 3,500 in case of individual account and Rs 7,000 in case of joint account. Individuals can get interest income up to Rs 10,000 from post office savings accounts under Section 80TTA of the Income Tax Act or up to Rs 50,000 under Section 80TTB if they are elderly citizens.
Further, one can also claim deduction benefit under section 10(15)(i) on interest income from savings account up to Rs.3,500 in respect of individual account and Rs.7,000 in respect of joint account. Consequently, a non-senior person can declare Rs 7,000 as tax free interest on a jointly owned post office savings account, as well as Rs 7,000 respectively of tax benefit from interest income up to Rs 10,000 on a post office savings account. in surplus.
Note that if you have declared exemption on interest earned from your savings account maintained at a post office, you should declare such exemption on your Income Tax Return (ITR) under ‘Exempt Income’.
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