Post Office Monthly Income Scheme POMIS Interest rate, Features, tax details

Post Office Monthly Income Scheme (POMIS)
Eligibility	individual age above 10 years (Minor) 18+
Interest rate	7.7%*
How to open	Offline at any Post Office
Investment Limit Per Year	4.5 lakh for a person (9 lakhs jointly)
Premature closing	with one year no benefit, after 1 year between 1-3 years 2% penalty, 3-5 year 1% penalty on interest.
Monthly income Returns	if 4.5lakhs @ 7.7%  INR 2888 Monthly income
Maturity / Lock-in Period	5 Years
Main Feature	Capital Protection with Regular Monthly Income
Extension	you can extend or reopen the account with family members.
Tax Benefits	NO tax benefits on invested & Monthly Income

 

HOW POMIS (Post office Monthly Income Scheme) Works?

If we invest 4.5 lakh once at a time In the post office. they pay Monthly Income (2888) /as Interest earned that amount with an Interest rate 7.7*.

If our family members invest jointly 9 lakhs then our monthly income would be 2888*2= 5776.

 

How to Open POMIS Account?

1. Visit any nearest Post office, Open Saving Account First with the minimum payment of 20INR 50 or 500INR.
2. You need to carry 2 Passport size photos, ID & Address Proof. Along with your invested Lumpsum Money to deposit.
3. You will get a monthly payout after 1 month.

PS: don’t forget to carry payment cheque. cash (there may be limits for cash) and KYC documents. incase of minor DOB Certificate child.

PO MIS VS FD Fixed Deposit

PO MIS Interest rate High 7.7*-8%

FD Most banks up to 6.6*

Tax benefits of FD: You can deduct up to 1.5 lakhs for the year with 5 years Tax Saving FD. There will be a TDS if interest earns more than (40,000 in a year).

Tax Implication on Post Office Monthly Income Scheme

1. NO TDS deducted at Source
2. Section 80C Not applicable
3. Invested & withdrawal amounts are taxable as you need file ITR if your income exceeds current year income slab.

post office mis interest rate 2019

Interest rate adjusted quarterly according to market conditions by GOI.

Year	Interest rate
2018-19	7.7%

If you are looking double your money with Post office scheme there will be a scheme called (Kisan vikas patra)KVP Its doubles your money in 9 years 10 months 118 months. but no tax benefits.

PO MIS calculation

Deposit	Interest	Monthly income
1 lakh	7.7	722
2 lakhs	7.7	1444
3 Lakhs	7.7	1925
4.5	7.7	2888
9 lakhs	7.7	5776
13.5 lakhs	7.7	8664

Alternatives to POMIS

1. NSC,  (NOT pays Monthly)
2. Senior Citizen Saving Scheme (for 60+ Years individuals, Payouts quarterly you can invest up to 15 lakhs at a time with tax benefits)
3. NPS, PPF (Not like FD, It’s saving scheme)
4. Post Office FD / TD. (But not regular withdrawals)
5. Monthly Payout FIxed Deposits  TDS Deducted
6. Monthly Pension Insurance schemes
7. Monthly Income Mutual Funds (MId -High Risk )
8. DEBT Stocks (Corporate Bonds & Govt Bonds) with fixed income based as the Interest rate.
9. Equity Stocks Selling on Monthly (HUge Risk Its dangerous loss capital)*