Comprehensive Guide • Savings Schemes

Post Office Monthly Income Scheme (POMIS): Rules, 7.4% Rate & Calculation

✍️ Author: AG World Tools Editorial Team ⚖️ Reviewed by: Verified by AG World Tools Technical & Financial Review Board 📅 Last Reviewed: 2026-11-01

The Post Office Monthly Income Scheme (POMIS) is a sovereign savings program administered by India Post that provides fixed, predictable monthly income for a 5-year tenure at an annual interest rate of 7.40%. The maximum deposit limit is ₹9,00,000 for a single account and ₹15,00,000 for a joint account (held by up to three adults with equal shares).

Monthly interest is credited directly into the depositor's linked Post Office Savings Account or commercial bank account via ECS/NACH on the monthly anniversary of the deposit date.

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POMIS Parameters and Operational Rules

Parameter	Specification
Current Interest Rate	7.40% per annum (Payable Monthly)
Tenure	5 Full Years (60 months) from deposit date
Minimum Deposit	₹1,000 (multiples of ₹1,000)
Max Deposit (Single Account)	₹9,00,000
Max Deposit (Joint Account)	₹15,00,000 (all joint holders have equal share)
Payout Mode	Auto-credit to Post Office Savings / Bank Account
Tax Status	No 80C rebate; Interest taxable at investor's slab rate
TDS on Interest	Zero TDS deducted at source by Post Office

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Monthly Income Calculation Formula

$$\mathbf{\text{Monthly Payout}} = \frac{\text{Principal} \times \text{Annual Interest Rate}}{12}$$

Worked Example: Maximum Single and Joint Deposits

Single Account at Maximum ₹9,00,000:

$$\text{Monthly Income} = \frac{9,00,000 \times 0.074}{12} = \mathbf{₹5,550 / \text{month}}$$ (Annual Payout: ₹66,600 | 5-Year Total Interest: ₹3,33,000)

Joint Account at Maximum ₹15,00,000:

$$\text{Monthly Income} = \frac{15,00,000 \times 0.074}{12} = \mathbf{₹9,250 / \text{month}}$$ (Annual Payout: ₹1,11,000 | 5-Year Total Interest: ₹5,55,000)

At the end of 5 years, the full principal amount (₹9 Lakh or ₹15 Lakh) is returned intact.

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Premature Withdrawal and Penalty Rules

Within 1st Year: No withdrawal permitted under any circumstance.

Between 1 and 3 Years: Premature closure allowed with a deduction of 2% of the principal deposit.

Between 3 and 5 Years: Premature closure allowed with a deduction of 1% of the principal deposit.

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Frequently Asked Questions

Is TDS deducted by the Post Office on POMIS interest?

No. India Post does not deduct Tax Deducted at Source (TDS) on monthly interest payouts. However, the interest earned is fully taxable and must be reported under "Income from Other Sources" in your annual Income Tax Return (ITR).

What happens if I do not withdraw the monthly interest?

Unclaimed monthly interest remaining in the POMIS account does not earn any additional interest. It is best practice to instruct India Post to auto-credit payouts to a savings account or auto-invest into a Post Office Recurring Deposit (RD).

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