The Post Office offers a variety of long-term and short-term investment plans, although it should be noted that not all investment options are tax-free; for example, the interest paid on some Post Office schemes is taxable, and section 80C of the Income Tax Act, 1961 are not applicable.
It’s crucial to keep in mind that TDS is deducted on transactions when the payment’s value exceeds the established limit. TDS is not applicable on amounts below the predetermined threshold.
Here are post office investment schemes on which TDS is deducted and on which TDS is not deducted.
If your interest income exceeds Rs. 40,000 for general residents, the bank or post office will deduct tax at source from the interest you earn on your recurring deposit. If the sum is less than the threshold amount, no tax will be deducted from recurrent deposits made at a bank or post office. The maximum TDS deduction for senior folks is Rs 50,000.
The deposit amount (up to Rs. 1.5 Lakhs) under the 5 Years TD will be eligible for a tax deduction under Section 80C of the Income Tax Act. As a result, tax deductions for deposits made into TD accounts with one, two, or three years are not permitted.
Under this scheme, TDS will be deducted.
Interest obtained through this plan is taxed. When filing your tax returns, you must include interest income under “Income from Other Sources” and pay the appropriate income tax rate.
Interest earned is taxable, and no deduction under Sec 80C for deposits made. TDS to be deducted on interest earned for more than Rs 40,000 and Rs 50,000 in case of senior citizens.
Under the Senior Citizen Savings Scheme (SCSS), tax benefit is available under Section 80C for deposits. TDS is to be deducted on interest earned for more than Rs 50,000 p.a.
Under the Mahila Samman Savings Certificate, TDS is to be deducted on interest earned for more than Rs 50,000 p.a. for senior citizen and Rs 40,000 for general citizens.
PPF falls under exempt, exempt, exempt category, tax rebate will be available under Section 80C for deposits (maximum Rs 1.5 lakh p.a.), and interest is tax-free.
The National Savings Certificate deposits up to Rs. 1.5 lakhs are eligible for a tax benefit under section 80C of the Income Tax Act. TDS does not apply on the interest amount of NSC, unlike fixed deposit.
The returns are totally taxable because KVP is not qualified for 80C deductions. However, withdrawals made after the scheme’s maturity are not subject to tax deducted at source (TDS).
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