Are you planning to invest in something? Then this article is for you. March is almost over, which means you have limited time left for income tax planning. After March 31, this opportunity will be gone as the new financial year starts on April 1. So, let’s explore five post office schemes that can help you save on income tax while also providing solid returns.
PPF
The Public Provident Fund (PPF) is a popular choice among many. It offers an interest rate of 7.1% and matures after 15 years. You can invest a minimum of ₹500 and a maximum of ₹1.5 lakh each year. This scheme is great for long-term wealth accumulation. Plus, it falls under the EEE category, meaning you get tax benefits on your investment, the returns, and the maturity amount.
SSY
If you have a daughter under 10 years old, consider investing in the Sukanya Samriddhi Yojana (SSY) in her name. This scheme offers an interest rate of 8.2%. You can contribute between ₹250 and ₹1.5 lakh annually. The investment period is 15 years, and when your daughter turns 21, she receives the total amount along with interest. Like the PPF, this scheme also qualifies for EEE tax benefits on the investment, interest, and maturity amount.
Post Office Time Deposit Scheme
The Post Office Time Deposit (TD), also known as Post Office FD, allows you to save on taxes, but you need to invest in a 5-year FD to qualify. Tax benefits are only available for the 5-year term; shorter tenures do not offer any tax advantages. Currently, the interest rate for a 5-year FD at the post office is 7.5%, and you can claim a tax deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act, 1961.
National Security Advisory Board
Just like a post office fixed deposit, investing in the NSC offers both tax benefits and profits. You can kick off your investment with as little as Rs 1,000, and there’s no upper limit. Right now, it offers an interest rate of 7.7%. You can invest for a duration of 5 years, and you can also claim a tax deduction of up to Rs 1.5 lakh under section 80C.
As the name suggests, the Senior Citizens Savings Scheme is designed specifically for senior citizens. This scheme allows them to invest for 5 years while enjoying tax savings. You can start with a minimum investment of Rs 1,000, and the maximum investment can go up to Rs 30 lakh. The interest rate for this scheme is 8.2%. Similar to the NSC, you can also claim a tax exemption under section 80C for investments up to Rs 1.5 lakh each year, but keep in mind that the interest earned is taxable.