Introduction : Dopbnk Full Form
Eligibility of the Post Office RD Interest Rate
Individuals who want to open an RD account in Post Office must meet these criteria –
- Indian Nationals who are over the age of 18 years.
- Minors who are over the age of 10 years.
- Parents or guardians who wish to open and operate the account of a minor on their behalf.
- Indian nationals above the age of 18 years would be deemed eligible to operate an RD account in Post Office either singly or jointly.
Documents Required to Open an RD Account
- A post office account-opening form
- Two photographs (passport size)
- Address and identity proof such as Aadhaar, passport, PAN card, or declaration in Form 60 or 61 as per the Income Tax Act, 1961, driving license, voter’s identity card, or ration card.
- identity proof for verification purposes at the time of opening the account
- Select a nominee and a signature of a witness to complete the formalities
How does Taxation Apply to a Post Office RD Account?
An RD account in the post office falls under the tax exemptions umbrella as per Section 80C. Individuals can claim up to Rs. 1.5 Lakh as per annum tax exemption under this section.
However, the interest generated through the post office RD scheme is liable for taxation. Individuals need to pay a tax amount as per their income tax slab. Additionally, an interest that exceeds Rs. 10,000 would be liable for a TDS deduction. Individuals who have an active PAN would pay TDS at the rate of 10%, while those without one would pay the same but at the rate of 20%.
The Rebate Offered for Post Office RD Interest Rate 2024
Rebate is the discount offered to the Post Office RD Scheme holder by the post office to encourage them to deposit money into their account in due advance. In the case of the RD scheme in the post office, individuals would be able to avail rebates on their deposits that were invested at least 6 months in advance. Moreover, such rebates are made available on a deposit equivalent to at least 6 installments.
However, in case of delay in deposits, individuals would be liable to pay the penalties. They are allowed a maximum of 4 defaults after which their account will be discontinued. They would accrue a default penalty of 5 paise on every Rs. 5; the sum penalty accrued along with the missed deposits would have to be deposited into their RD account. Individuals can revive their ‘discontinued account’ within 60 days post their 5th default.