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 ₹50 Lakh corpus pays about ₹32,696 a month (₹3,92,350 a year) without touching principal. Income tax on it: nil.
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 | ₹11,00,000 | 7.2% | ₹79,750 | Monthly / quarterly |
| Total | ₹50,00,000 | — | ₹3,92,350 | ≈ ₹32,696/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 ₹3,92,350 against the new regime: nil — the interest stays below the ₹4 lakh basic exemption of the new regime, so no tax is due even before any rebate.
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.
Total interest here is about ₹3,92,350 — just under the ₹4 lakh basic exemption of the new regime. No rebate is needed, no calculation is needed; the income simply is not taxable. From ₹75 lakh upwards the arithmetic starts leaning on the Section 156(2)(a) rebate instead. That makes ₹50 lakh the cleanest corpus in the whole range: every rupee of interest is yours and the ITR is trivial.
The post office will see ₹3,12,600 of your interest a year (SCSS + POMIS together) — well past the ₹1 lakh senior threshold — so it must deduct 10% TDS unless you file Form 121. The bank FD, though, earns ₹79,750 — under the threshold, which applies per payer. Keep the FD in one bank and it never triggers TDS at all. Your liability is nil either way; the form just decides whether you wait a year for a refund.
It looks like the weak leg — 7.4% against SCSS's 8.2% — but it is the only instrument here that pays monthly, it is government-backed with no bank risk to diversify, and its ₹9 lakh single-holder ceiling (₹15 lakh joint) is separate from the SCSS ceiling. For the slice between the SCSS cap and your FD comfort level, nothing else government-backed pays monthly.
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 ₹32,696 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 ₹3,92,350 a year. nil — the interest stays below the ₹4 lakh basic exemption of the new regime, so no tax is due even before any rebate.
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.
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Written and checked by the PaisaSamajh editorial desk · Last reviewed: 24 August 2026 · How we check this →