post office savings account interest rate | Post office savings account Benefits, know what is interest rate, tax rules, benefits of post office savings account, know what is interest rate, tax rules
Benefits of Post Office Savings Account
- Interest earned from post office savings account is tax free.
- You can start by investing a minimum of Rs 500.
New Delhi: Most of the government savings schemes are popular among investors as they have high public confidence, low risk and are safe. Depositing in a post office savings account is a great option for those who want to earn some extra profit while saving their hard earned money. One can start with a minimum investment of Rs 500, with no upper limit on investment. The interest rate offered is 4% per annum. Interest earned from post office savings account is tax free.
The interest rates offered on Post Office Savings Accounts are reviewed quarterly by the government and may change depending on market conditions. Along with offering higher interest rates, these accounts also help depositors in tax savings on interest up to Rs 3,500 in a financial year. For a joint account, the discount can be up to Rs 7,000.
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 Income Tax allows you to claim interest as tax free income from post office savings account.
According to a government announcement, interest up to Rs 3,500 for single accounts and Rs 7,000 for joint accounts is tax-free in post office savings accounts. 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. stated in the notification. Individuals can get interest income up to Rs 10,000 from savings accounts maintained with post offices under Section 80TTA of the Income Tax Act or up to Rs 50,000 under Section 80TTB in case of an elderly citizen.
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