5 post office schemes for Income Tax deduction under 80C

India Post provides reliable investment, returns via various post office schemes. One can select the plan that best fits his/ her investment objectives. Here are 5 post office schemes that offer tax benefits as per 80C of the Income Tax Act

National Savings Certificates (NSC)

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

NSC investments can be provided as collateral to banks as well as other government organisations if he/she wants to secure any loan.

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

Public Provident Fund (PPF)

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

Government of India. PPF offers guaranteed risk-free returns. Also, it falls under EEE status which means that the amount invested, interest earned and maturity amount received are all tax-free.

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

Post Office Time Deposit Account (TD)

Post Office Time Deposit has various tenures. Every three months, the interest rates for small savings plans, such as Post Office 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 the yearly interest.

Section 80C of the Income Tax Act of 1961 applies to the investment made under the 5-year TD. The interest rate for a 5 years term deposit as per current rates this quarter is 7 per cent.
Interest rates CHART (source- post office gov website)

Sukanya Samriddhi Yojana (SSY)

A Sukanya Samriddhi Yojana (SSY) account may be opened in the name of a girl child (younger than 10 years old). The girl takes ownership of the account once she becomes 18 years old.  

A minimum deposit of Rs 250 and a maximum of Rs 1,50,000 each fiscal year is allowed in the scheme.

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

Also, read- Credit Card closure full guide: Check RBI rules, documents required, procedure, and time taken to avoid hassle

Senior Citizen Savings Scheme (SCSS)

Any individual who has attained the age of 60 years or above on the date of opening of an account or any individual who has attained the age of 55 years or more but less than 60 years and has retired can 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 which is renewable once it reaches maturity for an additional three years.

Premature closure of the account is permissible subject to certain conditions.

SCSS investments qualify for deduction under Section 80C.

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