Investment in some of these schemes qualify for income tax benefits under Section 80C of the Income Tax Act.
The schemes that offer income tax benefits are Time Deposit (TD) Account, Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS) and National Savings Certificates (NSC).
Using these post office saving schemes, an taxpayer can claim a deduction up to Rs. 1.5 lakh in a financial year from taxable income.
Here are post office saving schemes that offer tax benefits:
Time Deposit Account
Investment in time deposits or fixed deposits of one-year, two-year and three-year maturity periods fetch an interest of 6.9 per cent. Five-year time deposit account offers a return of 7.7 per cent. The interest is payable annually but calculated quarterly. The investment under 5-year account qualifies for the benefit of Section 80C of the Income Tax Act, 1961.
15-year Public Provident Fund Account
The scheme offers an interest rate of 7.9 per cent per annum, which is compounded yearly. A person can open this account with Rs. 100 but has to deposit a minimum of Rs. 500 in a financial year. The maximum limit in a financial year is Rs. 1,50,000. The interest earned is also tax-free, according to India Post.
Senior Citizen Savings Scheme
An individual of the age of 60 years or more is eligible for the scheme. The scheme offers an interest rate of 8.6 per cent per annum. The minimum amount required to open the SCSS account is Rs. 1,000 and the maximum amount should not exceed Rs. 15 lakh.
National Savings Certificate
The NSC fetches an interest rate of 7.9 per cent per annum. This interest is compounded annually but payable at maturity. An NSC of Rs. 100 offers Rs.146.93 on maturity after five years, according to India Post.