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Useful articles for your finance management by our team of experts

exemption on interest income from post office savings bank account is limited to rs 3500

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As per the new provisions of the Income tax Act, exemption available on Interest income from Post office Savings bank account has been limited to Rs. 3,500 Per annum in case of individual, Rs 7,000 in case of Joint account. Earlier, interest income from Post office savings bank account was fully exempt

 

For Example, if an individual has income from Post Office Savings bank account of Rs 5000 then only 1,500 (5,000-3,500) will be taxable and the remaining Rs 3500 will be treated as exemption u/s 10(15)(i), while in case of Joint account the exemption limit is raised to Rs 7,000

  

Relevant Notification is as follows

Notification No. 32/2011[F.No.173/13/2011-Ita.I] /S.O.1296 (E), Dated 3-6-2011

In exercise of the powers conferred by sub-clause (i) of clause (15) of section 10 of the Income-tax Act, 1961 (43 of 1961) the Central Government hereby makes the following amendment to the notification of the Government of India in the Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i), vide number G.S.R. 607(E), dated the 9th June, 1989, namely

  

In the said notification, in the Table, for serial number 9 and the entries relating thereto, the following serial number and entries shall be substituted, namely:-

“9.Post Office Savings Bank Account: To an extent of the interest of Rs. 3500 in the case of an individual account and Rs. 7000 in the case of joint account”

  

The above notification will come in to force from the date of its publication in the official gazette

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