Exemption available on Interest from Post office Savings account has been restricted to Rs 3500 in case of Individual and Rs 7000 in case of Joint account holder. Earlier interest from post office savings account was fully exempt.
Thus it means that after this notification interest from Post office saving account will be exempted to the extent of Rs. 3500 in case of Individual account holders and Rs 7000 in case of Joint account holders.
For example if interest of an individual from P.O S/a is Rs 4000 then only 500 will be taxable out of it and 3500 will be treated as exempted u/s 10(15)(i).
The relevant notification is produced herebelow:
Section 10(15)(i) Of The Income-Tax Act, 1961 – Exemptions – Income By Way Of Interest, Etc. , On Bonds, Securities – Specification Of Bonds, Securities , Etc., Issued By Central Government –Amendment In Notification No. G.S.R. 607(E), Dated 9-6-1989
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 :—
1 2 | 3 |
“9. Post Office Savings Bank Account | To an extent of the interest of Rs. 3,500 in the case of an individual account and Rs. 7,000 in the case of joint account” |
2. This notification shall come into force from the date of its publication in the Official Gazette.
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