Tax Saving Scheme: Investing in the post office savings scheme allows you to benefit from a tax exemption of up to Rs 1.5 lakh under Section 80C of the Income Tax Act, in addition to receiving attractive returns. As the current financial year concludes on March 31, it is advisable to make your investments before this deadline to avail of the tax benefits. If you are considering an investment, we present to you the five most advantageous savings schemes offered by the post office.
Public Provident Fund (PPF)
The PPF is a long-term investment vehicle in India that provides tax benefits under Section 80C. You can initiate an investment with a minimum of Rs 500, and by investing up to Rs 1.5 lakh annually, you can claim a tax deduction. The interest rate for the PPF for the January-March 2025 quarter stands at 7.1%.
National Savings Certificate (NSC)
The NSC is a secure investment option that guarantees returns while also providing tax exemptions. Investors can claim deductions for annual investments up to Rs 1.5 lakh. The scheme accepts a minimum investment of Rs 1,000, with no maximum limit. For the January-March 2025 quarter, the NSC offers an interest rate of 7.7%, compounded annually and payable upon maturity.
Sukanya Samriddhi Yojana (SSY)
The SSY is a government initiative aimed at promoting savings for girls, offering substantial returns alongside tax exemptions. Investors can contribute between Rs 250 and Rs 1.5 lakh, with contributions up to Rs 1.5 lakh qualifying for a Section 80C deduction. Both the interest accrued and the maturity amount are tax-free. The interest rate for the SSY for the January-March 2025 quarter is 8.2%, calculated with annual compounding.
Senior Citizen Savings Scheme (SCSS)
The SCSS is a government-supported retirement savings program that provides tax exemptions and competitive returns. You can invest a minimum of Rs 1,000, with a maximum limit of Rs 30 lakh. Contributions up to Rs 1.5 lakh are eligible for tax deductions under Section 80C. The interest rate for the SCSS for the January-March 2025 quarter is 8.2% per annum.
Post Office Time Deposit (POTD)
Under the 5-year POTD scheme, investments of up to Rs 1.5 lakh qualify for a deduction under Section 80C, although the interest earned is subject to taxation. The minimum investment required to participate in this scheme is Rs 1,000, with no upper limit imposed. For the quarter spanning January to March 2025, the interest rate for the 5-year Post Office Time Deposit is set at 7.5%. While interest is calculated quarterly, it is disbursed annually.