Among multiple saving schemes with different interest rates, few schemes by India Post offer income tax benefits.
The Department of Posts offers nine saving schemes and some of them qualify for income tax benefits, NDTV reported.
Time Deposit (TD), National Savings Certificates, 15-year Public Provident Fund (PPF), Senior Citizen Saving Scheme (SCSS) are available schemes that come with income tax benefits.
Under these schemes, an investor can claim up to Rs 1.5 lakh in a financial year from taxable income under Section 80C of the Income Tax Act, 1961.
Time Deposit Scheme
Investments made for one-year, two-year and three-year maturity under this scheme could get investors an interest rate of 7 percent, and a 7.8 percent interest on deposits with a five-year lock in period.
Under the scheme, the interest is payable annually but calculated quarterly and any number of accounts can be opened in any post office. The investment under five-year TD qualifies for the benefit of Section 80C of the Income Tax Act, 1961.
National Savings Certificates
The NSC has an interest rate of 8 percent per annum and deposits under it also qualify for deduction under Section 80C of the Income Tax Act.
This interest is compounded annually but payable at maturity.
15-Year Public Provident Fund Account
The 15-year PPF fetches 8 percent of interest rate per annum and the deposits can be made in lump-sum or in 12 installments. The maturity period is 15 years but the same can be extended within one year of maturity for further five years and so on. Deposits under the scheme qualify for deduction under Section 80C of I-T Act
Senior Citizen Savings Scheme
The scheme is open for any individual of the age of 60 years or more and offers an interest rate of 8.7 per cent per annum, payable from the date of deposit of 31 March/ 30 September/31 December in the first instance and thereafter, interest shall be payable on 31 March, 30 June, 30 September and 31 December.
Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1 April 2007.
(With inputs from NDTV)
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