Interest income from post office

[Guest]

Hi All, I will be greatful if reply my query immediately. My Client has opened an account with Post Office. Account is in the name of 'POST OFFICE TERM DEPOSIT'. WHETHER INTEREST INCOME RECEIVED ON THAT DEPOSIT IS EXEMPTED UNDER THE INCOME TAX ACT, IF YES THEN PLEASE GIVE ME THE SECTION REFERENCE. THANKS IN ADVANCE

[Guest]

There is no such exemption. However, post office term deposit is eligible for 80C part of investment allowed to be deducted from the gross total income of the assessee. Moreover, the deposit should be 5 year time deposit for the purpose of section 80C.

AI Summary

Interest income exemption for post office term deposit not available; deposit may qualify for deduction under section 80C if five year. Interest income on a Post Office Term Deposit is not exempt and remains taxable. The deposit may qualify for a deduction under section 80C of the Income Tax Act only if it is the specified five year time deposit and is claimed as an investment for deduction from gross total income.