India Post offers multiple small savings schemes to help taxpayers save income tax. If you are still filing taxes under the Old Tax Regime, you should complete all tax-savings investments for FY25 before March 31, 2025.
Under Section 80C of the Income Tax Act 1961, taxpayers under the Old Tax Regime can claim tax deductions on up to ₹1.5 lakh of their total income.
Post Office Public Provident Fund (PPF) scheme
Under this scheme, deposits can be made in lump sum or 12 installments and a joint account can also be opened. The maturity period is 15 years, but the same can be extended within one year of maturity for a further five years, and so on.
However, premature closure of the PPF account is not allowed before 15 years. The interest on the deposits is completely tax-free, and withdrawal is permissible every year from the seventh financial year from the year of opening the account. Currently, the Post Office PPF account is offering 7.1% interest.
Post Office Sukanya Samriddhi Yojana (SSY)
This scheme allows the opening of one account in the name of a girl child up to the age of 10 years. A legal or natural guardian can open a maximum of two accounts in the name of two different female children.
The Sukanya Samriddhi Yojana accounts can be closed after the girl is 21 years old. If the account is not closed at that time, the deposited amount will continue to earn interest. SSY account is currently offering 8.2% interest, higher than most bank FDs.
Post Office National Savings Certificate (NSC)
This scheme is designed especially for government and salaried employees and businesspersons. It does not have a maximum limit for investment and no TDS. NSCs can be used as collateral security to get bank loans.
The NSC account matures in 5 years, and it is currently offering 7.7% interest. The interest from the scheme is payable at maturity.
Post Office Senior Citizen Savings Scheme (SCSS)
This scheme is open to people aged above 60 years. Additionally, people aged between 55 and 60 years who have retired on superannuation or voluntarily, can also open an account under this scheme. The maturity period is five years. Senior citizens are allowed to invest up to ₹30 lakh in this scheme, which is currently offering 8.2% interest.
5- year Post Office Time Deposit
This is like any other 5-year tax-saving fixed deposit plan offered by banks. Currently, the 5-year time deposit in the post office can be booked at 7.5% interest. Deposits under this scheme qualify for deduction under section 80C, subject to a limit of ₹1.5 lakh in a financial year.
Since these schemes are backed by the central government, there is a full guarantee on returns.
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