India Post or Department of Posts, which runs postal network of country, offers a number of saving schemes with different interest rates.
It offers nine savings schemes and investment in some of them qualify for income tax benefits, said India Post.
The schemes, which offer income tax deduction -- Time Deposit (TD), Senior Citizen Savings Scheme (SCSS), Public Provident Fund (PPF), National Savings Certificates -- are available at post office and banks.
Using these post office saving schemes, an investor can claim a deduction up to Rs 1.5 lakh in a financial year from taxable income under Section 80C of Income Tax Act, 1961.1.
Time Deposit Scheme: Investment in time deposits (TD) of one-year, two-year and three-year maturity periods fetch an interest of 7 per cent.
Five-year Time Deposit offers a return of 7.8 per cent.
The interest is payable annually but calculated quarterly.
The investment under 5-year TD qualifies for benefit of Section 80C of Income Tax Act, 1961, said India Post.2.
Senior Citizen Savings Scheme: An individual of age of 60 years or more is eligible for scheme.
The scheme offers an interest rate of 8.7 per cent per annum, payable from date of deposit of March 31/ September 30 / December 31 in first instance and thereafter, interest shall be payable on March 31, June 30, September 30 and December 31.
Tax deducted at source (TDS) is deducted on interest, if amount is more than Rs.
10,000 per annum.
Investment under this scheme qualifies for benefit of Section 80C of Income Tax Act, 1961 from April 1, 2007.3.
15-Year Public Provident Fund Account: The scheme offers an interest rate of 8 per cent per annum, which is compounded yearly.
One can open an account with Rs.
100 but needs to deposit a minimum of Rs.
500 in a financial year.
Deposits under scheme qualify for deduction under Section 80C of I-T Act, said India Post.
The interest earned is also tax-free, it further said.4.
National Savings Certificates: The NSC fetches an interest rate of 8 per cent per annum and deposits under it also qualify for deduction under Section 80C of Income Tax Act.
This interest is compounded annually but payable at maturity.
An NSC of Rs.
100 will offer Rs.
146.93 on maturity after five years.