5 post office savings schemes that offer income tax benefits

  • Post office offers a variety of savings schemes that offer income tax benefits

Livemint
First Published19 Jan 2023, 01:09 PM IST
Post office savings schemes: The interest rate on Sukanya Samriddhi account is 7.6%.
Post office savings schemes: The interest rate on Sukanya Samriddhi account is 7.6%.

To increase long-term savings, the government introduced post office savings schemes. India Post offers a variety of investment options that serve a double purpose- one of investing and the second offering income tax benefits under Section 80C. Public provident fund (PPF), 5-year post office deposit scheme, National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY), and Senior Citizen Savings Scheme (SCSS) are among the 5 post office savings schemes that offer income tax benefits.

1) Public provident fund (PPF)

After the latest revision, the interest rate on the PPF is 7.1%. PPF, which has a maturity period of 15 years, enjoys EEE (exempt, exempt, and exempt) status.  The minimum amount that must be deposited in a PPF account in a financial year is 500 and the maximum limit is 1.5 lakh. Your contributions up to 1.5 lakh a year qualify for income tax deduction under Section 80C. The best part about PPF is that the interest earned is also not taxable, and the amount received at maturity is also exempt from tax.

2) Sukanya Samriddhi Yojana (SSY)

The interest rate on Sukanya Samriddhi account is 7.6%. SSY also enjoys EEE status. The minimum amount that must be deposited in a SSY account in a financial year is 250 and the maximum limit is 1.5 lakh.

3) 5-Year Post Office Time Deposit Scheme

Just just like bank fixed deposits (FDs) with 5-year tenure, investment in the 5-year post office deposit scheme qualifies for tax deduction up to 1.5 lakh per financial year. The minimum investment is 1000, however there is no upper limit. Currently, the 5-year post office deposit scheme fetches 7%. 

4) National Savings Certificate (NSC)

Currently, the NSC offers an interest rate of 7%. There is no upper limit for investment in the NSC and the minimum investment required is 100. Deposits of up to 1.50 lakh in the NSC in a financial year qualifies for tax deduction under Section 80C. 

5) Senior Citizen Savings Scheme (SCSS)

An individual of the age of 60 years or more can open the Senior Citizen Savings Scheme account. Currently, SCSS pays an interest at the rate of 8% per annum. The maturity period is five years. Investment of up to 1.5 lakh in the Senior Citizen Savings Scheme qualifies for Section 80C tax benefits but the interest earned is taxable. 

 

 

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First Published:19 Jan 2023, 01:09 PM IST
HomeMoneyPersonal Finance5 post office savings schemes that offer income tax benefits

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