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List of Post office Tax Saving Schemes Research Team | Posted On Monday, June 10,2019, 06:19 PM

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List of Post office Tax Saving Schemes



Post office schemes are a good investment to park surplus money for varying time periods. Post office saving schemes offer capital protection and generate better returns than bank fixed deposits. However, some post office schemes also provide tax benefits to investors along with high interest. This is the reason most post office schemes are popular with Indian investors.

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List of Post Office Tax Saving Schemes

Listed below are some of the post office schemes that help you save tax:

5 Year Post Office Time Deposit:

Post office Time Deposit or POTD is a popular investment in India. You have the twin benefits of higher returns as well as tax benefits under Section 80C of the income tax act up to Rs 1.5 Lakhs a year. Listed below are some of the important features of POTD accounts:

  • Any Indian citizen can open POTD accounts with a minimum deposit of Rs 200. The scheme has no upper limit.
  • The scheme can be availed by low-income and mid-income groups in both urban and rural areas as POTD accounts can be opened at any post office across India.
  • You can hold any number of POTD accounts. The nomination facility is also available for these deposits.
  • These accounts offer good returns with an interest rate ranging from 6.90% to 7.70% a year.
  • POTD with tenure of 5 years is eligible for tax deduction under Section 80C of the Income Tax Act.

See Also: Important Post Office Saving Schemes

National Savings Certificate:

NSC is a safe and fixed income investment scheme. The scheme comes has a 5 year maturity period and offers tax benefits of up to Rs 1.5 Lakh under Section 80C. Some of the important features of NSC are:

  • Only Indian residents can avail the benefits of this scheme. HUF and NRIs are not allowed to invest in NSC.
  • You can invest in the NSC with a minimum investment of Rs 100 and there is no specified upper limit.
  • Loans can be availed by pledging NSC certificates as collateral
  • The maturity proceeds are free from TDS
  • The deposits earn a fixed interest rate throughout the period which is compounded annually. The current rate of interest offered by NSC is 8% a year.

See Also: Post Office Recurring Deposit Account

Senior Citizen Savings Scheme:

This is a popular savings scheme for senior citizens which offer risk-free investment along with tax benefits. The scheme comes with 5-year tenure and the maturity proceeds can be re-invested for another 3 years. Some of the benefits of this scheme are:

  • SCSS allows individuals above 60 years to make an investment.
  • Individuals who have retired with superannuation or VRS are allowed to invest after attaining 55 years of age.
  • The deposits are capped at Rs 7.5 lakhs for single accounts and Rs 15 lakhs for jointly held accounts.
  • The interest is payable on a quarterly basis and is a great way to earn income, post retirement.
  • The current rate of interest offered on SCSS is 8.7%. The scheme also provides capital protection along with good interest income.

Sukanya Samriddhi Yojana Account:

Sukanya Samriddhi Yojana scheme is designed to encourage the parents of the girl child save money for the future. Money is saved for the girl child’s education and marriage. The scheme comes with a host of benefits along with a tax deduction:

The account can be opened till the age of 10 years (This is the girl child’s age).

  • The account can be opened with a minimum deposit of Rs 250 a month
  • The scheme offers an attractive interest rate of 8.5% on deposits
  • The scheme offers a maximum tax exemption of Rs 1.5 Lakh a year under Section 80C. The scheme falls under the EEE tax regime, where the amount invested up to a limit, interest income and amount withdrawn at maturity is tax exempt.
  • The investments can be made as a lump sum or in monthly instalments.

See Also: Post Office Monthly Income Saving Scheme

Public Provident Fund:

PPF is a long term investment scheme which is immensely popular among investors, as it allows you earn higher returns due to compounding and offers capital protection. An added benefit of PPF account is it allows investors save taxes with the investment.

  • PPF accounts can be availed by all resident Indians above 18 years of age
  • PPF has a lock-in of 15 years and can be opened at post offices as well as certain selected banks
  • PPF comes under EEE tax regime. The investor can avail tax deduction of Rs 1.5 Lakh a year under section 80C.
  • The interest earned and the maturity proceeds are tax exempt.

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