Tax-saving: 5 post office schemes with section 80C benefits You can select the plan that best fits your investment objectives
The government introduced Post Office schemes to encourage long-term savings and to provide tax breaks on some of them in order to make it more attractive to investors. India Post offers a variety of simple-to-open, effective, and secure investing options. You can select the plan that best fits your investment objectives. As per Section 80C of the Income-tax Act of 1961, these programmes also offer tax benefits. NSC, SCSS, SSY, and PPF are a few of these tax-advantaged programmes offered by the post office.Also read: Post Office Schemes latest Interest Rates in India for 2023
Public Provident Fund (PPF)
A Public Provident Fund is a type of financial product that enables its user to accumulate an amount of money sufficient to be paid at maturity together with interest. The current yearly compound interest rate offered by PPF is 7.1%. Additionally, the PPF scheme offers a threefold tax benefit because, in accordance with Section 80C of the IT Act, contributions made to the scheme up to a maximum of Rs. 1.5 lakhs, interest received on those deposits, and maturity amounts are all tax-free.
Sukanya Samriddhi Yojana (SSY)
A Sukanya Samriddhi Yojana account may be opened in the name of a girl child who is younger than 10 years old. The girl will take ownership of the account once she becomes 18 years old. When a girl gives birth to twins or triplets, additional accounts may be opened. The current interest rate being offered on this plan is 7.6%. A minimum initial deposit of Rs 250 and a maximum of Rs 1,50,000 each fiscal year are required to join the scheme. This plan offers tax exemption under Section 80C of the Income Tax Act of 1961 in addition to financial savings.
Senior Citizen Savings Scheme (SCSS)
Anyone 60 years of age or older may invest in this plan. Those who are retired and over 55 but under 60 can choose this plan as long as they invest within a month of getting retirement benefits. The minimum and maximum investment limits are Rs 1,000 and Rs 15 lakh, respectively. Its five-year term is renewable once it reaches maturity for an additional three years. The Senior Citizen Savings Scheme offers an interest rate of 8% per year for deposits placed in the January-December quarter. Every quarter, the interest is due and completely taxable. The plan doesn't offer any interest when it matures. Additionally, once the investment is made, the interest rate stays the same. Senior citizens can claim a tax deduction for investments in this scheme under Section 80C of the Income Tax Act, 1961.
Post Office Time Deposit Account (TD)
The National Savings Time Deposit Account provided by India Post is another name for the Post Office Time Deposit. They have various tenures and are very similar to bank fixed deposits. Every three months, interest rates for small savings plans, such as Post Office time deposits, are reviewed. The minimum investment is Rs 1000; there is no limit. The account holder's savings account will be credited with the yearly interest.
Section 80C of the Income Tax Act of 1961 applies to the investment made under the 5-year TD. Interest rate for 5 year term deposit for this quarter is 7%.
National Savings Certificates (NSC)
A minimum of Rs. 1,000 should be invested, in multiples of Rs. 100. There is no upper limit. Five years from the deposit date, the account will reach its maturity. An NSC investor may also obtain loan financing by securing a bank pledge of their investment. For instance, a person can earn a guaranteed return on the NSC at a rate of 7% interest rate on the National Savings Scheme. The annual fixed interest paid by the NSC on a regular basis guarantees a steady income for the investor. The deposits qualify for deduction under section 80C of the Income Tax Act 1961.
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This story originally appeared on: India Times - Author:Faqs of Insurances
