Did you know that postal savings account interest up to Rs 3,500 is tax exempt? Check other details here
New Delhi: Did you know that interest charged on a postal savings account of up to Rs 3,500 in a fiscal year is tax exempt? In the case of an individual account, interest up to Rs 3,500 is tax exempt, while a joint account holder can benefit from the interest exemption up to Rs 7,000. Post office savings currently offer 4% per annum while the minimum amount required for opening an account is Rs500.
Which makes The attractive postal savings account?
It’s a great plan for retail investors looking to earn a fixed rate of interest. The tax exemption as well as the higher interest rate make it more attractive than a bank savings account which is currently at a historically low level. The interest rate on the State Bank of India (SBI) savings account is 2.7%, while a post office savings account offers you 4% interest.
ALSO READ: TCS Q1 Net Up 28.5% at Rs 9,008 Cr, the number of employees exceeds 5 Lakh Mark in the first quarter
In the case of a savings bank account, an individual can claim a deduction of up to Rs 10,000 on interest earned.
Interest on the post office savings account is calculated after calculating the minimum balance between the 10th of each month or the last day of the month. However, make sure that if the balance is not increased to Rs 500 at the end of the fiscal year, Rs 100 will be deducted as an account maintenance fee, and if the account balance has become zero, the account will automatically be deducted. firm.
Small savings instruments have remained one of the preferred instruments for retail investors, as they generally offer higher interest rates than instruments such as bank deposits or savings accounts. It should be noted that the interest rates for small savings plans, including the post office savings account, are revised quarterly. For the July to September quarter, the government kept the interest rate on small savings plans unchanged.