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In the era of rising inflation and uncertain market, every family is looking for a safe investment option, which can provide a fixed and fixed income every month. While there is a risk of capital loss in the stock market, mutual funds or equity, the Post Office Monthly Income Scheme (POMIS) has emerged as an example of safe and regular returns. This scheme, operated under the Ministry of Communications of the Central Government, has the Sovereign Guarantee of the Government of India, that is, every penny of the deposited capital and interest is completely safe. By going to any nearest post office across the country from Lucknow, Kanpur, Gorakhpur, husband and wife can open a joint account together and without any mental stress, they can get a fixed pension like income in their savings account every month. This scheme is especially proving to be a boon for those couples who want a permanent cashflow for household expenses like monthly household ration, children’s fees or electricity and water.
The returns received in the Post Office Monthly Income Scheme directly depend on the interest rate decided by the government. At present the central government is working on this scheme 7.4 percent per year Offering attractive and stable interest rates. Under the rules, a maximum of ₹ 9 lakh can be deposited in a single account, while a maximum of ₹ 9 lakh can be deposited in a joint account between husband and wife. ₹15 lakh You can make a lump sum investment of Rs.
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Annual interest calculation: If the husband and wife together deposit the maximum limit i.e. entire ₹ 15,00,000 in a joint account, then the total interest for 1 year at the rate of 7.4% comes to ₹ 1,11,000 (15,00,000 × 0.074).
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Pension amount received every month: This entire annual interest is divided into 12 equal months and given to the account holders (1,11,000 ÷ 12). Thus every month on the exact date in your account Full ₹9,250 The amount is credited.
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Total interest earnings in 5 years: This plan comes with a lock-in period of 5 years (60 months). The total amount that the investor couple received during these 5 years ₹5,55,000 Net interest of (₹9,250 × 60) is received.
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Full return of principal on maturity: After completion of 5 years maturity, the entire ₹15,00,000 of your deposited principal amount is safely returned to your account. That means the capital remains the same and separate interest of ₹ 9,250 per month continues to be received for 5 years.
The process of opening Post Office MIS account is very easy and transparent. Any adult Indian citizen can open this account in his own name or jointly with another adult. Joint account can be opened by two or three persons together, in which the share of all the account holders is considered equal. A minor above 10 years of age can also operate an account in his own name, while for children younger than that, a parent or guardian can open an account. The account in the scheme can be started with a nominal amount of minimum ₹1,000 and thereafter the investment can be increased in multiples of ₹1,000. To open an account, Aadhar card, PAN card, address proof, passport size photograph and joint application form of both husband and wife are required. This interest amount gets auto-credited directly into the post office savings account or investor’s bank account (like SBI, PNB etc.) through ECS.
Usually this scheme is for 5 years, but in case of any emergency, the account holder gets the facility to withdraw money even before the stipulated period. However, the government has set some clear rules for this:
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Before 1 year: No money can be withdrawn from the deposited capital before completion of 1 year from the date of account opening.
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Within 1 to 3 years: If you close the account after completion of 1 year and before 3 years, 2 percent is deducted from the total principal deposited and the remaining amount is refunded.
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Between 3 to 5 years: If the account is closed after completion of 3 years and before 5 years, then 1 percent is deducted from the principal amount. On completion of the period of 5 years, the account holder can withdraw his entire deposit or can continue this monthly income further by opening a new MIS account for 5 years under the new rules.
It is important to be aware of the tax rules regarding interest received on Post Office Monthly Income Scheme. There is no tax exemption on the amount deposited in this scheme under Section 80C of the Income Tax Act. Additionally, the interest of ₹9,250 received every month is also fully taxable and is added to the annual gross income of the account holder. Whatever tax slab the investors fall in, they have to pay tax accordingly. However, the biggest relief is that tax is deducted at source on this interest payment by the post office i.e. TDS is not deducted. If your total annual income falls within the basic exemption limit, you will not have to pay any additional tax on this interest. Due to government security, risk-free fixed monthly income and easy operation, this scheme still remains the first choice of all those families who want a fixed income sitting at home.