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Tag: post office monthly income scheme

  • Budget 2023: Govt raises deposit restrict of Post Office Monthly Income Scheme

    Finance Minister Nirmala at present introduced to extend the utmost deposit restrict of Post Office Monthly Income Scheme (POMIS).  The new most deposit restrict on this Government of India (GoI) backed small saving scheme might be   ₹9 lakh from ₹4.5 lakh for a single account holder and ₹15 lakh from ₹9 lakh for joint account holders.

    Finance Minister Nirmala Sitharaman made an announcement on this regard throughout her Union Budget speech.

    “The most deposit restrict for Monthly Income Account Scheme might be enhanced from ₹4.5 lakh to ₹9 lakh for single account and from ₹9 lakh to ₹15 lakh for joint account,” said Nirmala Sitharaman while presenting the Union Budget 2023 in parliament.

    After this rise in maximum deposit limit from ₹4.5 lakh to ₹9 lakh, minimum amount required to open Post Office Monthly Income Scheme or POMIS account would remain same ₹1000. Similarly, in a joint account, all joint account holders will have equal share in the total deposited amount. 

    As per the information available on India Post’s official website, “Interest shall be payable on completion of a month from the date of opening and so on till maturity.” However, if the curiosity payable each month in Post Office Monthly Income Scheme or POMIS just isn’t claimed by the account holder, such POMIS curiosity shall not earn any further curiosity.

    Pre-mature withdrawal is allowed on this small saving scheme however not earlier than earlier than one 12 months of account opening. 

    “If account is closed after 1 12 months and earlier than 3 12 months from the date of account opening, a deduction equal to 2% from the principal might be deducted and remaining quantity might be paid,” the Department of Post website claimed adding, “If account closed after 3 year and before 5 year from the date of account opening, a deduction equal to 1% from the principal will be deducted and remaining amount will be paid.”

     

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  • Post Office Monthly Income Scheme: Interest charge, different particulars it is best to know

    Post Office Monthly Income Scheme (POMIS) is among the hottest risk-free put up workplace saving schemes the place an investor can make investments with a minimal deposit of ₹1,000. Middle and low revenue group traders can have a look at this Post Office MIS scheme as tax-saving possibility as nicely as a result of one can declare revenue tax exemption underneath Section 80C of the Income Tax Act on one’s funding on this scheme. It has a lock-in interval of 5 years and Post Office Monthly Income Scheme rate of interest will stay unchanged all through the funding interval. Means, return on Post Office Monthly Income Scheme is assured and an investor would get return on one’s cash as per the Post Office Monthly Income Scheme rate of interest on the time of funding.

    Here we checklist out essential particulars that an investor should know whereas investing in Post Office Monthly Income Scheme:

    1] Interest charge: As this put up workplace small saving scheme is a lock-in product, its rate of interest will stay mounted as per the speed of return on the time of funding. For instance, Post Office Monthly Income Scheme rate of interest is presently at 6.60 per cent each year. So, if an investor invests on this put up workplace scheme, it’s going to get 6.60 per cent annual return on one’s cash on the time of maturity.

    Interest shall be payable on completion of a month from the date of opening and so forth until maturity and an investor has to assert for it. As per the India Post web site, “If the interest payable every month is not claimed by the account holder such interest shall not earn any additional interest.” The Post Office Monthly Income Scheme curiosity is taxable into the arms of depositor.

    2] Deposits: As per the India Post web site, Post Office MIS account could be opened with minimal of ₹1000 and in a number of of ₹100. A most of ₹4.50 lakh could be deposited in a single account and 9 lakh in joint account. In a joint account, all of the joint holders shall have equal share in funding.

    3] Lock-in interval: Like any tax-saving fiat cash, this put up workplace saving scheme additionally has 5 12 months lock-in interval. One can declare revenue tax exemption on one’s funding on this scheme underneath Section 80C of the Income Tax Act, 1961.

    4] Guaranteed return scheme: this put up workplace scheme is a risk-free assured return scheme. If an investor invests on this Post Office Monthly Income Scheme at present, it’s going to get 6.60 per cent return on one’s funding on the time of maturity.

    5] Maturity: Account could be closed on expiry of 5 years from the date of opening on submission of utility kind with cross ebook at involved Post Office. In case the account holder dies earlier than the maturity, the account could also be closed and quantity will probably be refunded to nominee/authorized heirs. Interest will probably be paid as much as the previous month, through which refund is made.

    6] Pre-mature closure of account: No deposit shall be withdrawn earlier than the expiry of 1 12 months from the date of deposit. If account is closed after 1 12 months and earlier than 3 12 months from the date of account opening, a deduction equal to 2 per cent from the principal will probably be deducted and remaining quantity will probably be paid. If account closed after 3 12 months and earlier than 5 12 months from the date of account opening, a deduction equal to 1 per cent from the principal will probably be deducted and remaining quantity will probably be paid.

    7] Eligibility: Only an Indian resident can open a Post Office Monthly Income Scheme account. By submitting the wanted documentation to the closest Post Office, any grownup can open this Post Office MIS account. A minor above 10 years in age can open this account in his personal title.

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  • Senior residents funding choices with assured common earnings. Check particulars

    Amid the Covid-19 pandemic, the banks had lowered the rates of interest. Senior residents in search of mounted common earnings have been hit probably the most on this falling rate of interest situation. Top banks, together with State Bank of India (SBI) supply most 6.2% to senior residents on their mounted deposits with a tenure between 5-10 years, publish workplace small financial savings schemes present comparatively larger fee. So let’s check out a few of the funding choices the place senior residents can park their hard-earned cash to get a assured common earnings.

    Senior Citizen Saving Scheme (SCSS)

    Senior Citizens Savings Scheme (SCSS) is a government-run small financial savings product which presently gives 7.40% every year. SCSS has a tenor of 5 years, which might be prolonged by one other three years. However, the higher restrict for investing in SCSS is ₹15 lakh. SCSS fits senior residents in search of a excessive mounted fee of return and a daily earnings on a quarterly foundation. Investment in SCSS can be eligible for tax deduction as much as ₹1.5 lakh every year below Section 80C of the Income-tax Act, 1961.

    Interest fee: 7.4 per cent

    Payable: Quarterly

    Tenure: 5 years

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    Special mounted deposit (FD) scheme for senior residents

    Bank mounted deposits have all the time been a preferred alternative for many senior residents. Bank FDs supply month-to-month, quarterly, half-yearly or annual rate of interest payouts. Some banks like SBI, ICICI Bank and HDFC Bank supply particular deposits to senior residents on deposits of 5-years and above. These particular FDs are efficient until 30 June 2021. Most Small Finance Banks are providing an rate of interest of above 7 per cent on a few of their tenure to senior residents.

    Interest fee: More than 6% and above 7% in some Small Finance Banks

    Payable: Monthly, quarterly, half-yearly or annual curiosity

    Tenure: 5 years to 10 years

    Pradhan Mantri Vaya Vandana Yojana (PMVVY)

    PMVVY (Pradhan Mantri Vaya Vandana Yojana) is a retirement cum pension scheme for senior residents. The scheme is operated and managed by Life Insurance Corporation (LIC). PMVVY scheme has been prolonged as much as 31 March 2023. At current, the scheme is offering assured pension at 7.40% every year payable month-to-month.

    Interest fee: 7.4 per cent

    Payable: Monthly

    Tenure: 10 years

    Post Office Monthly Income Scheme (POMIS)

    The Post Office Monthly Income Scheme (POMIS) has a tenure of 5 years and as soon as invested the rate of interest continues to stay the identical until maturity. Currently, for the quarter ending June 2021, the rate of interest is 6.6 per cent every year.

    Interest fee: 6.6 per cent

    Payable: Monthly

    Tenure: 5 years

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  • 3 tricks to shield your retirement funds from tax erosion

    Individuals work laborious to build up a retirement fund to fulfill every day bills and unplanned expenditure post-retirement. It is a job half performed as your cash has to yield a return above inflation. Moreover, you continue to need to pay tax in case you don’t make investments your retirement fund in the precise monetary merchandise. The problem is constructing a retirement fund to fulfill the next life expectancy and maintain tax legal responsibility at bay.

    Let’s check out some tricks to shield your retirement fund from tax erosion:

    Understand the tax implications of various sources of revenue

    “Tax is a big issue post-retirement as revenue can simply exceed the exemption restrict for senior residents. You have a threshold exemption restrict of Rs3 lakh per monetary yr for senior residents and Rs5 lakh for the tremendous senior residents beneath the previous tax regime,” mentioned Archit Gupta, founder and chief govt officer, ClearTax.

    Invest a part of your retirement fund in monetary merchandise the place the yearly outflow, or maturity quantity, is tax-free. For occasion, retirees might put money into tax-free bonds the place the curiosity payouts are tax-free.

    Gupta mentioned, “You might select extremely rated bonds for the protection of the funding. Moreover, curiosity provided by tax-free bonds ranges from 5.5-6.5% each year. Tax-free bonds have a maturity interval of 10-15 years. It is appropriate for retirees who don’t require funds instantly and fall within the larger revenue tax brackets.”

    Invest in Senior Citizens Savings Scheme (SCSS)

    You might make investments part of your retirement fund within the Senior Citizens Savings Scheme, or SCSS. It is a protected funding for senior residents as it’s backed by the central authorities. It presently gives an rate of interest of seven.4% for the January to March 2021 quarter.

    Retirees above 60 years can make investments a most of Rs15 lakh within the SCSS and depend on quarterly curiosity payouts for normal revenue. It has a lock-in interval of 5 years and the curiosity from SCSS is totally taxable.

    “SCSS gives one of many highest rates of interest amongst fixed-income investments. It additionally gives retirees a tax deduction of as much as a most of Rs1.5 lakh per monetary yr beneath Section 80C of the Income Tax Act. The excessive and warranted revenue together with the tax profit make SCSS an acceptable funding for retirees,” mentioned Gupta.

    Invest in POMIS or financial institution FD

    Retirees might make investments a portion of the retirement fund within the publish workplace month-to-month revenue scheme (POMIS) if they’re beneath the tax-exemption restrict. It is a government-backed scheme that provides the next rate of interest than financial institution FDs and has a lock-in interval of 5 years.

    Retired individuals might make investments a most of Rs4.5 lakh individually, or Rs9 lakh collectively, in POMIS. It is appropriate for traders who search fastened month-to-month revenue and are unwilling to take a danger of their investments. However, curiosity payouts are taxable and decrease returns for these within the larger revenue tax brackets.

    Bank FDs are a dependable supply of revenue in retirement. The security and versatile tenure make it an acceptable choice to park a portion of the retirement fund. “Banks provide senior residents round 0.5% larger rate of interest each year. Retired people who’re beneath the fundamental tax exemption restrict or fall within the decrease revenue tax bracket might put money into POMIS and financial institution FDs,” mentioned Gupta.

    Debt mutual funds provide tax-efficient revenue

    Retirees might make investments a portion of the retirement fund in liquid mutual funds. It is a low-risk choice that invests in debt securities and cash market devices with a maturity interval of 91 days. Moreover, it’s a tax-efficient funding as in contrast with financial institution FDs.

    Gupta mentioned, “The long-term capital positive factors after holding liquid funds for 3 or extra years are taxed at 20% after indexation. It adjusts the acquisition worth of the funding for the results of inflation. The indexation advantages scale back tax obligations considerably, for retired people within the larger revenue tax brackets.”

    Individuals should plan investments and distribution of revenue after retirement in a tax-efficient method. It minimizes tax outgo and enhances post-retirement revenue serving to retirees keep their present residing requirements.

    Do you’ve got a private finance question? Send in your queries at [email protected] and get them answered by trade specialists.

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