India Post, which runs the postal network of the country, offers nine types of government-sponsored savings schemes. Investment in some of these schemes qualifies for income tax benefits under Section 80C of the Income Tax Act, according to India Post's website - indiapost.gov.in. The schemes that offer income tax benefits are Time Deposit (TD), Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF) and National Savings Certificates (NSC). Using these saving schemes, a person can claim a deduction up to Rs. 1.5 lakh in a financial year from taxable income under Section 80C.
One can claim deduction in taxable income in the following small savings schemes in a post office:
Time Deposit Scheme
Investment in time deposits (TD) of one-year, two-year and three-year maturity periods fetches interest at the rate of 7 per cent. Five-year time deposit account offers a return of 7.8 per cent. The interest is payable annually but calculated quarterly, according to the India Post website.
Senior Citizen Savings Scheme
A person of the age of 60 years or more is eligible for the scheme. The scheme offers an interest rate of 8.7 per cent per annum. Tax deducted at source (TDS) is deducted on interest, if the amount is more than Rs. 10,000 per annum, according to India Post.
15-Year Public Provident Fund Account
The scheme offers an interest rate of 8 per cent per annum, which is compounded yearly. Investors can open this account with Rs. 100 but needs 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 the post office website.
National Savings Certificate
The NSC fetches an interest rate of 8 per cent per annum. This interest is compounded annually but payable at maturity. An NSC of Rs. 100 will offer Rs. 146.93 on maturity after five years, according to India Post.
Election Results for Lok Sabha Election 2019 will be out on May 23. Get the latest election news and live updates on ndtv.com/elections. Catch all the action on NDTV Live. Like us on Facebook or follow us on Twitter and Instagram for news updates from each of the 543 parliamentary seats for the election 2019