Page 89 - DMGT515_PERSONAL_FINANCIAL_PLANNING

Personal Financial Planning

Notes Tax Treatment
Income tax relief is available on the amount of interest under the provisions of section 80L
of Income Tax Act.

Premature Withdrawal
Premature withdrawals from all types of Post Office Time Deposit accounts are permissible
after expiry of 6 months with certain conditions.

Post Maturity Interest
Post maturity interest “at the rate applicable to the post office savings accounts from time
to time”, is payable for a maximum period of 2 years.

2. Post Office Recurring Deposit accounts
Who can open?
(i) A single adult or two adults jointly,
(ii) A guardian on behalf of a minor or a person of unsound mind; or

(iii) A minor who has attained the age of ten year, in his own name.
Where can be opened?
At any post office.
Maturity

Period of maturity of an account is five years.
Deposits
Sixty equal monthly deposits shall be made in an account in multiples of ` five subject to
a minimum of ten rupees.
Defaults in Deposits
(i) Accounts with not more than four defaults in deposits can be regularized within a
period of two months on payment of a default fee.
(ii) Account becomes discontinued after more than four defaults.
Interest & Repayment on Maturity
(i) On maturity of the accounts opened on or after 1st March, 2003, an amount (inclusive
of interest) of ` 728.90 is payable to a subscriber of Rupees: Ten denomination account.
(ii) Amount repayable, inclusive of interest, on an account of any other denomination
shall be proportionate to the amount specified above.
Pass Book
Depositor is provided with a pass book with entries of the deposited amount and other
particulars duly stamped by the post Office.
Premature Closure
Premature closure of accounts is permissible after expiry of three years provided that
interest at the rate applicable to post office savings account shall be payable on such
premature closure of account.

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