Every rate below is the notified Q2 FY 2026-27 rate. Every tax number is worked to the rupee.
Short answer: parked across SCSS, POMIS and senior-citizen FDs at today's notified rates, a ₹1 Crore corpus pays about ₹62,904 a month (₹7,54,850 a year) without touching principal. Income tax on it: ₹17,742 on paper (5% on the slice above ₹4 lakh).
Rates are for Q2 FY 2026-27 (Jul-Sep 2026), unchanged for the 10th straight quarter · New tax regime, FY 2026-27 · Figures are indicative, as of August 2026
This is a reference allocation, not advice — your health costs, family support and risk appetite move the pieces. What does not move is the arithmetic.
| Where it sits | Amount | Rate | Interest / year | Paid out |
|---|---|---|---|---|
| SCSS — at the ₹30 lakh cap | ₹30,00,000 | 8.2% | ₹2,46,000 | Quarterly |
| Post Office Monthly Income Scheme | ₹9,00,000 | 7.4% | ₹66,600 | Monthly |
| Senior-citizen bank FDs | ₹61,00,000 | 7.2% | ₹4,42,250 | Monthly / quarterly |
| Total | ₹1,00,00,000 | — | ₹7,54,850 | ≈ ₹62,904/month |
SCSS pays quarterly simple interest; POMIS pays monthly; FD assumes a large-bank senior rate of 7.25% (typical Aug 2026 range 6.75–7.30%). SCSS and POMIS rates are government-notified for Q2 FY 2026-27.
Interest of ₹7,54,850 against the new regime: ₹17,742 on paper (5% on the slice above ₹4 lakh) — and the Section 156(2)(a) rebate wipes it to zero, because total income is under ₹12 lakh.
TDS is a separate machine from tax. Any single payer (a bank, or the post office as one payer) that credits you more than ₹1 lakh of interest in the year must deduct 10% — even when your final tax is nil. Form 121, filed at the start of the year with each payer, switches that deduction off when your liability is zero.
This is the fact almost nobody believes until they run it: about ₹7,54,850 of interest a year is fully covered by the new regime's Section 156(2)(a) rebate, because it sits under ₹12 lakh. A retiree whose only income is this ladder pays no income tax on a ₹1 crore corpus. At a blended ~7.5%, zero-tax capacity runs out only around ₹1,58,94,040 of corpus — past that, every extra lakh of interest is taxed normally from the ₹4 lakh slab up (the rebate is a cliff, not a slope — the same cliff our salary tax pages map at ₹12 lakh).
The temptation at this size is chasing small-finance-bank FDs at 8.2–8.5%. The extra ~1% on ₹61 lakh is about ₹61,000 a year — real money — but DICGC cover is still ₹5 lakh per bank, so capturing it safely means a dozen accounts across a dozen small banks, each with its own Form 121, maturity date and renewal. Some retirees happily run that ladder; most should take a slice (₹10–15 lakh across 2–3 small banks, fully insured) and leave the rest in large banks. The honest framing: at ₹1 crore your risk is not return, it is concentration and paperwork decay as you age.
Every instrument above matures, resets, and asks for a decision — SCSS every 5 then 3 years, POMIS every 5, FDs on their own cycle. An annuity is the opposite trade: a permanently lower rate in exchange for never making another decision. At ₹1 crore, annuitising a slice (say ₹20–25 lakh) to cover the non-negotiable monthly bills, while the ladder above funds everything else, is a legitimate design — not a product pitch. If your corpus came via NPS, the December 2025 exit rules decide how much of it must take that route anyway.
Held jointly, POMIS allows ₹15 lakh instead of ₹9 lakh — moving ₹6 lakh from FD (7.25%) to POMIS (7.4%) is small, but it also moves it from bank risk to sovereign backing. At this corpus, the joint account is worth opening for the backing more than the basis points.
Three resets are built in: SCSS matures at year 5 (then extends in 3-year blocks at the then-prevailing rate), POMIS matures at year 5, and each FD at its own term. Small-savings rates are reviewed every quarter — they have not moved since January 2024, but each reset re-prices your income at whatever is then notified. Revisit the ladder at every maturity, not every headline.
About ₹62,904 a month at current notified rates, using SCSS at 8.2%, POMIS at 7.4% and senior bank FDs around 7.25% — without spending principal.
Total interest is about ₹7,54,850 a year. ₹17,742 on paper (5% on the slice above ₹4 lakh) — and the Section 156(2)(a) rebate wipes it to zero, because total income is under ₹12 lakh.
Yes, wherever one payer credits over ₹1 lakh of interest in the year — unless you file Form 121 (the declaration that replaced Form 15H from 1 April 2026) with that payer at the start of the financial year.
No. SCSS locks its rate for your 5-year term, POMIS for its term, FDs until maturity. Each renewal re-prices at the rate then notified — the government reviews small-savings rates every quarter.
Related: All corpus levels · Senior FD rates · Form 121 · FD Calculator
A note on section numbers. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 with effect from 1 April 2026. Section numbers on this page are those of the 2025 Act. Where you know a provision by its old number, the mapping is: 115BAC → 202, 87A → 156, 16(ia) → 19, 80CCD(2) → 124, 112A → 198, 10(10) → 19(1) Table Sl. Nos. 3-6.
The official pages this page is checked against. If one of them disagrees with us, it wins.
Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →