If you are looking for monthly income from a reliable source then the Post Office Monthly Income Scheme( POMIS) is a worthy option. POMIS provides regular monthly income after you deposit a lump sum amount in any post office in India.
POMIS is suitable for those who need regular and guaranteed monthly income from their money.
Last Updated 1 October 2023.
Table of Contents
How does POMIS work
- Deposit a lump sum amount
- Receive monthly payment for 5 year
- After 5 year, deposited money is refunded
Features of Post Office Monthly Income Scheme
# The Post Office monthly income scheme is a five year scheme, backed by the Government of India therefore absolutely safe.
# POMIS offers guaranteed fixed income on a monthly basis.
#MIS Account can be transferred from one Post Office to another.
Also read:
Monthly Income Scheme From Post Office -Invest In POMIS
Eligibility to open POMIS Account
# Only Indian residents can open the account.
#Account can be opened by an individual adult.
#Joint accounts can be opened by two or three adults. All joint account holders have equal share in each joint account.
#A Guardian or Parent can open an account in the name of a minor.
#A minor of 10 years and above age can open and operate the account.
#NRI (Non Resident Indians) and HUF (Hindu Undivided Family) can NOT open the account.
How to open POMIS account
- Account can be opened by cash or cheque.
- In case of cheque, the date of realisation of cheque in the account will be the date of account opening.
- Any number of accounts can be opened in any Post Office subject to the maximum investment limit by adding balance in all the accounts.
Also read: Best investment options for pensioners and senior citizens
How to make Online Payment of PPF/SSA/ Post Office Savings
Deposit Amount in POMIS
Minimum deposit amount is Rs. 1,000. For a single account, the maximum deposit limit is Rs. 4.5 lakhs 9 lakh.
For a joint account, the POMIS maximum limit is Rs. 9 lakhs 15 lakh ( As per Budget 2023) Deposit amount should be in multiples of Rs. 1,000.
An individual can invest a maximum of Rs. 9 lakhs in MIS (including his share in joint accounts).
Maturity period is 5 years in this scheme. POMIS interest rate 2023 is 6.6% 7.1% ( from 1.1.2023)paid on monthly basis.
Latest POMIS interest rate Oct to Dec2023 – 7.4%.
Interest rate (on the day of account opening) will remain the same throughout the tenure of MIS. It will not change even if there are changes to the interest rate thereafter.
From 01-Apr-2016, the interest rate of this scheme has been announced on a quarterly basis. Note that it used to be on a yearly basis earlier.
You can receive monthly interest through an auto-credit facility into savings accounts present at the same post office. In case of MIS accounts present at CBS (Core Banking Solution) Post offices, monthly interest can be credited into savings accounts present at any CBS Post offices.
Premature closure of Post Office Monthly Income Scheme
Account can be closed prematurely after one year of opening the account.
If you close the account before 3 years, 2% of the deposit amount will be deducted and you will get the remaining amount.
If you close the account after 3 years, 1% of the deposit amount will be deducted and you will get the remaining amount.
Examples:
If you close the account having a deposit of Rs. 1 lakh before 3 years, then Rs. 2,000/- (2% of Rs. 1 lakh) will be deducted and you will receive the remaining amount Rs. 98,000/- (Rs. 1 Lakh minus Rs. 2,000/-)
If you close the account having a deposit of Rs. 1 lakh after 3 years, then Rs. 1,000/- (1% of Rs. 1 lakh) will be deducted and you will receive the remaining amount Rs. 99,000/- (Rs. 1 Lakh minus Rs. 1,000/-)
Single account can be converted into Joint account and Vice Versa.
Minor after attaining majority has to apply for conversion of the account in his name.
Nomination facility is available. You can nominate either at the time of account opening or after opening the account (but before maturity).
POMIS Taxation
- No income tax benefits.
- No tax deduction for the deposit amount under Section 80C of Income Tax Act.
- No TDS (Tax Deducted at Source) under this scheme by the Post Office.
- Interest received under this scheme is taxable. You need to declare the interest income under “Income from Other Sources” during tax returns and pay the income tax as per your income tax slab
- Income tax benefits will be the same on both old and new tax systems.
