Post Office Monthly Income Scheme

What is Post Office Monthly Income Scheme?

The Post Office Monthly Income Scheme (MIS) is one of the most popular schemes for people who need a steady monthly income. You deposit a lump sum, and every month the post office credits interest directly to your account — like a salary from your savings.

Unlike SCSS which is only for senior citizens, MIS is open to all adults. You can open it jointly with a spouse or family member to double the investment limit.

Who Should Invest?

• Retirees who need a monthly income to cover expenses
• Anyone who has received a lump sum (inheritance, sale of asset) and wants steady monthly returns
• Non-working spouses who want a personal monthly income

Key Features

• Monthly interest credited automatically
• Single account limit: ₹9 lakhs | Joint account limit: ₹15 lakhs
• 5-year tenure. Can be extended.
• Premature closure allowed after 1 year (penalty applies)
• No TDS — interest received is in your hands, you declare it in ITR
• No 80C benefit, but income is predictable and sovereign-guaranteed

Eligibility — Who Can Open MIS?

• Any resident Indian adult can open a POMIS account, individually or jointly with up to 3 adults
• A guardian can open an account on behalf of a minor or a person of unsound mind
• A minor above 10 years of age can open an account in their own name
• NRIs cannot open a new POMIS account

How to Invest in MIS

• Visit any post office with a filled POMIS account opening form
• Submit KYC documents — PAN card and address proof
• Deposit the amount by cheque or demand draft — minimum ₹1,500, in multiples of ₹100
• Link a Post Office Savings Account (or provide bank details) for automatic monthly interest credit
• Collect your passbook confirming the account opening

Premature Withdrawal and Loan Against MIS

POMIS cannot be closed within the first year under any circumstance. Between 1 and 3 years, premature closure costs a 2% penalty deducted from the principal. Between 3 and 5 years, the penalty drops to 1%. There's no loan-against-POMIS facility comparable to NSC or KVP — if you need funds before maturity, premature closure (with the applicable penalty) is the only route.

Taxation and ITR Reporting

POMIS gets no Section 80C deduction. The monthly interest credited to your account is fully taxable under "Income from Other Sources" at your slab rate — you need to add up all 12 months' credits and declare the total in your ITR. India Post does not deduct TDS on POMIS interest, so the responsibility for computing and paying tax on it is entirely yours.

Watch Out For

• Interest is taxable — add it to your income when filing ITR
• No 80C tax deduction
• Interest rate lower than SCSS — SCSS is better if you qualify

MIS Example

₹9,00,000 (the single-account maximum) invested in POMIS at the current 7.4% p.a. pays out roughly ₹5,550 every month directly to your linked account — the full amount is taxable at your slab rate, so treat it as gross income, not spendable income, when you plan your monthly budget.

How MIS Compares

A side-by-side look at MIS against PPF, NSC, and the 5-year Post Office Time Deposit — all figures are the currently published, verified rates.

Compare All NSS Schemes

See how MIS compares to all other National Savings Schemes in one table.

All NSS Schemes