Investment in Post Office Instruments Becomes Taxable

The Central Board of Direct Taxes has recently issued a notification saying that all the incomes which will be earned from the post office savings schemes are going to be taxed from the ongoing financial year. This is being done in order to keep a track of all the deposits that are made under these schemes and at the same time bring them to the level of bank interest earnings. Now that it’s mandatory for an individual to declare his investments in the tax returns, such deposits have come under the scanner of the IT department.
According to the notification, in the case of individuals, any income more than Rs 3,500 per annum and in case of joint accounts, more than Rs 7,000, is taxable. Small depositors who save 1 or 2 lakh rupees per annum jointly have been exempted from paying any tax. Tax will have to be paid only by the people who invest in these schemes beyond the limit that has been prescribed.
Shishir Jha, CBDT spokesperson said, “This is done to minimize and phase out tax deductions and exemptions”. The amount invested by both small and big investors in the post office schemes has continuously been on the rise over the years and hence, there was a need for a mechanism to keep a check.