If you are making regular savings through Post Office, here is some good news. An important announcement has been made by the Department of Posts relating to the ceiling of maximum balance in a post office savings account.
Till recently, the ceiling of maximum balance in the savings account was Rs. 1 lakh in single savings account and Rs.2 lakh in Joint savings account. Now the Postal Department has decided that there is no limit for retaining balance in single as well as joint savings account. It has also been decided that a depositor or depositors can deposit any amount into single and joint savings account.
In addition, the maturity value of any savings instrument can be credited into single account of the depositor standing in the same post office irrespective of the balance in the account. Any cheque either issued by postmaster or any other authority irrespective of any amount can be credited into post office account irrespective of the balance in the account.
After the above said amendments made by the Postal Department, from the Financial year 2011-12, interest income of Rs.3500 in the case of single account and Rs.7000 in case of joint account will be exempted from Income Tax.
However, it is decided that it will be the duty of the depositor(s) to show the interest income earned from Post Office Savings Account(s) beyond the limit prescribed above in the Income Tax return and pay due Income Tax.