Interest earned on Post Office savings accounts to be taxed from current fiscal

Interest earned on Post Office savings accounts to be taxed from current fiscal

The government has decided tolevy 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.

The CBDT-- which is the administrative authority of the Income Tax Department-- has issued the notification to all thetax collection ranges across the country for implementation.

Taxpayers will have to reflect this investment on their incometax returns.

"Taxpayers who now invest in the post office saving accounts schemes will now have to showthe interest earned on this scheme while filing their income tax returns. Interest upto 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.

The Assessing Officer (AO) will compute the tax on the interestearned, 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 themaximum limit is Rs one lakh for an individual account and Rs2 lakh in case of a joint account.

Source: Economic Times dated 16 th June, 2011