NEWS & ADVICE : FIXED DEPOSITS
Postal deposits eligible for IT exemption & bonus
By Vaibhav Aggarwal
Dec 10, 2007
Print    Email    RSS   

New Delhi: The Government of India has decided to make the five year post office deposits and senior citizen's saving scheme floated by the postal department as eligible for Rs. 1 lakh income tax exemption. These saving schemes of post offices will get the tax exemption benefit from 1 April 2007 under Section 80C of the Income Tax act 1961.

Government has also announced a 5 percent bonus for the Post Office Monthly Income Account ( POMIA) scheme. This bonus will be payable on new accounts, which are opened after 8 December 2007. The interest rates offered on postal deposits will now effectively be 8.9 percent as against 8.3 percent available earlier.

This has been a longstanding demand and the government has now made the senior citizen savings scheme and five year postal deposits at par with Public Provident Fund (PPF) and tax saver fixed deposits etc. in terms of tax exemption. However , the tax exemption would be available only for the five-year scheme, which offers 7.5% interest. The senior citizen scheme offers 9% interest. A post-office deposit similar to a bank fixed deposit. with a maximum deposit period of five years.

This move is of great importance to bring investors back to once very popular saving instruments, namely the postal deposits. The decline in interest rates offered by banks on various term deposits are making the investors look for other avenues. With the bonus offered on postal deposits, they would certainly be a more attractive proposition now.


(Comments Posted : 0) Post Your Comments
Show All Comments
COMPARE QUICKLY
 Select a product:
 

CALCULATE QUICKLY
 Select a product:
 

EDITORS' PICKS
The new avatar of savings account would...
Gold ETFs or Gold Funds: Which One Should...
Carnival of Indian Personal Finance Blogs #6
Do you know what led banks to calibrate...
Complete guide to TDS on fixed deposits in...


What is the FD interest rate in India?
what is the bank interest rate for fixed deposit
as sr citizen i deposit 40lacs i want to know how...
Escorts in panchkula......9872814230???

NEWS THIS WEEK
Allahabad Bank bags award Sep 17, 2014
SBI revised rates for the term deposits of less than 1 crore Sep 16, 2014
HDFC to issue debit card PIN through SMS Sep 15, 2014
New branch of Corporation bank in Maharashtra Sep 12, 2014
Applicants invited for various post by UBI bank in Mumbai Sep 10, 2014
News Archive