5 postal schemes for the deduction of Income Tax under 80C

India Post provides reliable investment, returns through various post office schemes. One can select the plan that best suits his investment goals. Here are 5 post office schemes that offer tax benefits under 80C of the Income Tax Act

National Savings Certificates (NSC)

The National Savings Certificate (NSC) is a fixed income investment plan. Backed by the Government of India, the scheme has a maturity period of 5 years. One can invest as little as Rs 100 as an initial investment with no upper limit.

NSC’s investments can be provided as collateral to banks and other government organizations if you wish to obtain any loans.

This deposit qualifies for deduction under section 80C of the Income Tax Act of 1961.

Public Provident Fund (PPF)

The Public Provident Fund (PPF) is very popular among the salaried and non-salaried class. The PPF interest rate is compounded annually. The risk is very minimal or zero since it is backed by the

Indian Government. PPF offers guaranteed returns without risk. Also, it is under EEA status, which means that the amount invested, the interest earned, and the maturity amount received are tax-free.

One can contribute a minimum investment of Rs 500 and a maximum investment of Rs 1.50 lakhs. The investment qualifies for the deduction under 80C.

Post Office Time Deposit (TD) Account

The post office time deposit has several tenures. Every three months, the interest rates of small savings plans, such as Correos time deposits, are reviewed. The minimum investment is Rs 1000 and there is no upper limit.

The account holder’s savings account is credited with annual interest.

Section 80C of the Income Tax Act of 1961 applies to investment made under the 5-year TD. The interest rate for a 5-year deposit at current rates this quarter is 7 percent.
GRAPH of interest rates (source: Post Office government website)

Sukanya Samriddhi Yojana (SSY)

A Sukanya Samriddhi Yojana (SSY) account can be opened in the name of a girl (under 10 years of age). The girl takes ownership of the account once she turns 18.

The scheme allows a minimum deposit of Rs 250 and a maximum of Rs 1,50,000 each fiscal year.

In addition to financial savings, this plan offers tax exemption under Section 80C.

Also, read- Complete Credit Card Closing Guide – Check RBI Rules, Required Documents, Procedure and Time Taken to Avoid Problems

Savings Plan for the Elderly (SCSS)

Any person who has reached the age of 60 or older on the date an account is opened or any person who has reached the age of 55 or more but is less than 60 years of age and has retired may open an account.

The minimum and maximum investment limits are Rs 1,000 and Rs 15 lakh, respectively, as per the scheme. The scheme has a five-year term, renewable once it reaches maturity for an additional three years.

Early account closure is permitted subject to certain conditions.

SCSS investments qualify for the deduction under Section 80C.

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