Taxability of Post Office Saving Scheme Income in ITR filing AY 2026-27
To report Post Office savings scheme interest income in your Income Tax Return (ITR), you must declare it under “Income from Other Sources” (Schedule OS). Even if the income is fully exempt or qualifies for a deduction, it is mandatory to report it to ensure your ITR matches your Annual Information Statement (AIS).
Step-by-Step Reporting Guide in ITR
Step 1: Add Gross Interest in Schedule OS
- Log into the Income Tax e-Filing Portal.
- Navigate to Income From Other Sources (Schedule OS).
- Select “Interest from Savings Account” for standard Post Office Savings Accounts.
- Select “Interest from Deposit” for Recurring Deposits (RD), Time Deposits (FD), MIS, or SCSS.
- Enter the total (gross) interest earned before any exemptions or deductions.
Step 2: Claim Section 10(15)(i) Exemption (For Savings Accounts Only)
- In Schedule OS, look for the dropdown/section for Exempt Income / Deductions u/s 10.
- Choose Section 10(15)(i) from the options.
- Enter the eligible exemption amount: up to ₹3,500 for an individual account or ₹7,000 for a joint account.
- Note: This specific exemption applies under both the Old and New Tax Regimes.
Step 3: Claim Remaining Balance Deductions (Old Tax Regime Only)
If you file your return under the Old Tax Regime, you can claim the remaining taxable balance under Chapter VI-A Deductions:
- Section 80TTA: For individuals under 60 years old. Claim up to ₹10,000 on total combined savings account interest (Bank + Post Office).
- Section 80TTB: For senior citizens (60+ years old). Claim up to ₹50,000 covering all post office interest (Savings, FD, RD, MIS).
Taxability Breakdown by Scheme
| Post Office Scheme | Is it Tax-Exempt? | Tax & Reporting Rules |
|---|---|---|
| Savings Account | Partially Exempt | Exempt up to ₹3,500 (Single) / ₹7,000 (Joint) u/s 10(15)(i). Balance interest can be claimed u/s 80TTA or 80TTB (Old Regime only). |
| Public Provident Fund (PPF) | Fully Exempt | Interest is tax-free. Report it solely under Schedule EI (Exempt Income). |
| Sukanya Samriddhi (SSA) | Fully Exempt | Interest is completely tax-free. Report it strictly under Schedule EI. |
| Time Deposit (FD) / RD | Fully Taxable | Interest is added to your income and taxed at your regular slab rates. Senior citizens can claim deductions u/s 80TTB (Old Regime). |
| Monthly Income Scheme (MIS) | Fully Taxable | Entire annual interest payout must be reported in Schedule OS and taxed. No standard deductions under the New Regime. |
| Kisan Vikas Patra (KVP) | Fully Taxable | Interest is taxable on an accrual basis every year or collectively upon maturity. |
⚠️ Critical Alerts for AY 2026-27
- New Tax Regime Defaults: If you remain in the default New Tax Regime, you cannot claim Section 80TTA or Section 80TTB deductions. However, the Section 10(15)(i) core exemption of ₹3,500 / ₹7,000 remains fully active and should be utilized.
- Avoid TDS Form Mistakes: To prevent the Post Office from deducting TDS on taxable schemes (if your total annual income falls below the taxable threshold), you must now submit the unified Form 121, which has replaced the historical Form 15G and Form 15H.