The Indian government has decided to levy
tax on the interest obtained on
Post Office savings schemes from the current financial year.
The Central Board of Direct Taxes (CBDT) has brought out a notification in this regard recently, which stipulates that any interest earned beyond Rs 3,500 (in case of individual accounts) and Rs 7,000 (in case of joint accounts) will be taxable from the running fiscal.
Read: PPF, post office deposit rates may go up The CBDT - which is the administrative authority of the Income Tax Department - has issued the notification to all the tax collection ranges across the country for implementation.
Taxpayers will have to reflect this investment on their income tax returns.
Read: Be bullish on saving tax "Taxpayers who now invest in the post office saving accounts schemes will now have to show the interest earned on this scheme while filing their income tax returns. Interest up to Rs 3,500, in case of single accounts and and Rs 7,000 in case of joint accounts, is exempted," a senior I-T official said.
Read: Ways to cut your tax burden The Assessing Officer (AO) will compute the tax on the interest earned, beyond the exemption limit, accordingly, he said.
The current interest rates for Post Office savings deposits is 3.5 per cent per annum.
The minimum investment limit in this scheme is Rs 50 while the maximum limit is Rs 1 lakh for an individual account and Rs 2 lakh in case of a joint account.
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