Supplement your earnings with MIS

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If you want to earn regular income after retirement or additional earnings alongside a job, then the Post Office Monthly Income Scheme (MIS) can be helpful for you. In the budget for the financial year 2023-24, the government has provided significant relief to the common man by increasing the deposit limit of the Post Office Monthly Income Scheme (MIS). From April 1, 2023, instead of 4.5 lakh rupees, a person can deposit 9 lakh rupees in the Monthly Income Scheme (Post Office Monthly Income Scheme). Similarly, in the case of a joint account, this limit has been increased from 9 lakh rupees to 15 lakh rupees. After the higher limit, there has been an increased interest in the Monthly Income Scheme (MIS) among people.

Monthly Income Scheme Under the Monthly Income Scheme, the account holder receives interest payments every month. The account can be opened with a minimum of one thousand rupees. Its tenure is 5 years. An MIS can be opened at any post office by  filling a form along with KYC documents and PAN.

Return on MIS Currently, the MIS offers an annual interest rate of 7.4%, which is paid monthly. The government reviews the interest rates of small savings schemes, including MIS, every quarter. Due to fixed returns and government backing, there is less risk involved in this scheme.

Calculation of returns According to the personal finance platform Fintra, if a person deposits 9 lakh rupees at an interest rate of 7.4% for 5 years, they will earn a monthly income of 5,550 rupees. Similarly, in the case of a joint account condition, if 15 lakh rupees are deposited, a monthly interest of 9,250 rupees will be received.

Tax calculation on earnings from MIS? Chartered Accountant Vinod Raval explains that tax must be paid on the earnings from MIS. The interest earned is considered part of your income, and you have to pay taxes according to your tax slab. However, if the income from interest is less than 40,000 rupees in a financial year, no tax will be deducted at source. For senior citizens, this limit is 50,000 rupees. In the case of a joint account, both the primary and secondary account holders have to pay taxes. Under Section 80TTA of the Income Tax Act, there is no tax on interest income up to 10,000 rupees per year from a bank, cooperative society, or post office savings account. For senior citizens, this limit is 50,000 rupees. This decision can be utilized while filing the Income Tax Return (ITR).