With March coming to an end, there’s very little time left for income tax planning before the new financial year begins on April 1.
To help you save on taxes while earning great returns, here are 5 post office schemes that can be beneficial for both tax saving and growing your money.
1. Public Provident Fund (PPF)
PPF is a popular scheme that offers an interest rate of 7.1%. The scheme has a 15-year maturity period, and you can invest a minimum of ₹500 and up to ₹1.5 lakh annually.
It provides excellent long-term growth and is part of the EEE (Exempt, Exempt, Exempt) category, which means you get tax benefits on your investment, the interest earned, and the maturity amount.
2. Sukanya Samriddhi Yojana (SSY)
If your daughter is below 10 years of age, you can open an SSY account in her name. This scheme offers an interest rate of 8.2%.
You can invest between ₹250 and ₹1.5 lakh per year. The investment period is 15 years, and once your daughter turns 21, the full amount with interest is returned.
Like PPF, SSY also falls under the EEE category, providing tax exemptions on investment, interest, and maturity amount.
3. Post Office Time Deposit (Post Office TD)
The Post Office Time Deposit (also known as Post Office FD) allows you to save tax by investing in a 5-year FD.
This scheme offers an interest rate of 7.5%. You can claim tax benefits under Section 80C of the Income Tax Act, 1961, for investments up to ₹1.5 lakh.
However, tax benefits are only available for 5-year FDs, not for shorter-term deposits.
4. National Savings Certificate (NSC)
Similar to the Post Office FD, the NSC also offers tax benefits along with attractive returns. The interest rate is 7.7%, and you can start investing with just ₹1,000, with no maximum limit.
The scheme has a 5-year investment tenure, and you can claim a tax deduction of up to ₹1.5 lakh under Section 80C.
5. Senior Citizens Savings Scheme (SCSS)
The Senior Citizens Savings Scheme is specifically designed for senior citizens, offering an interest rate of 8.2%.
You can start investing with ₹1,000, and the maximum investment limit is ₹30 lakh.
The scheme offers tax benefits under Section 80C for investments up to ₹1.5 lakh annually, but the interest earned is taxable.
