Post Office Tax Savings Schemes Under 80C Tax Exemption 2024

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Post Office Tax Saving Schemes are good investment options that offer guaranteed income. Moreover, investments in these schemes qualify for tax exemption under Section 80C of the Income Tax Act, 1961. Since the Government of India backs the schemes, the risk is almost zero. Furthermore, investing in these schemes is very easy. Also, the schemes are operated by all the post offices across the country. This article covers the different Post Office Tax Savings Schemes and their features.

Best Post office Tax Savings Schemes Under 80 C in 2024

Scheme Name	Minimum Investment	Interest Rate
Post Office Time Deposit (POTD)	INR 1,000	6.90% to 7.50% p.a.
Senior Citizen Savings Scheme (SCSS)	INR 1,000	8.20% p.a.
Sukanya Samriddhi Account (SSA)	INR 250	8.00% p.a.
Public Provident Fund (PPF)	INR 500	7.10% p.a.
National Savings Certificate (NSC)	INR 100	7.70% p.a.

Compare Post Office Tax Saving Schemes under 80C

The Indian Post offers a wide range of investment schemes that are suitable for a diverse group of investors. Also, among the different Post Office schemes available, some schemes qualify for tax exemptions. Following post office schemes qualify for tax exemption under Section 80C of the Income Tax Act, 1961:

5 Year Post Office Time Deposit : The 5 Year Post Office Time Deposit (POTD) is among the popular small savings scheme offered by the Post Office. Furthermore, the scheme allows you to reinvest the interest into the scheme. As a result, you will be able to enjoy higher returns.
Senior Citizen Savings Scheme : SCSS is an exclusive scheme for senior citizen depositors. Therefore, the aim of the scheme is to generate regular income in the form of interest. As a result, it is an ideal investment option during retirement.
Sukanya Samriddhi Yojana: SSY is a savings scheme for a girl child supporting the ‘Beti Bachao, Beti Padhao’ campaign. Therefore, parents of the girl child can save towards the child’s education or marriage.
Public Provident Fund: PPF is a long term investment scheme that guarantees returns. PPF is ideal for long term goals such as retirement. The scheme offers good tax benefits and, therefore, can be a good investment option. Also, risk-averse individuals can invest in the scheme to generate significant returns.
National Savings Certificate: NSC is a small savings scheme that is ideal for low and mid-income groups. Also, the interest from the scheme is automatically reinvested. As a result, you can earn significant returns from the scheme.

Advantages of Post Office Tax Saving Schemes

The following are the advantages of investing in post office saving schemes:

Risk-Free Investment: Since the post office saving schemes are backed by the Government of India, the risk is low. Thus, the default risk is low.
Fixed and Guaranteed Returns: Post office savings schemes offer fixed returns. Since they do not invest in the markets, the returns don’t fluctuate. And, as the government backs the scheme, the returns are guaranteed.
Attractive Interest Rates: Post office saving schemes offer attractive interest rates. Some schemes offer higher rates than a bank deposit. Thus attracting large investor groups. Furthermore, for some schemes, the returns are also tax-free.
Easy to Invest: Investing in post office schemes is quite easy and hassle-free. You can open investment accounts at any post office across the county. Moreover, the application process is quite simple and easy.
Lower Investment Amount: Post office saving schemes do not require a high investment amount. These are small savings schemes that help individuals save regularly.

Who Should Invest in Post Office Tax Saving Schemes?

Investors who wish to diversify their investments across low-risk assets can invest in post office saving schemes. These scheme offer assured returns and are not subject to market fluctuations. Thus, these schemes can add good diversification to your portfolio of equity investments.

Furthermore, investors with low-risk tolerance levels and looking for guaranteed income can pick post office schemes.

Also, since these schemes offer tax exemption under Section 80C of the Income Tax, 1961, they are ideal for investors looking to save tax.

Compare Post Office Time Deposit Vs SCSS

Following is the comparison between different post office tax saving schemes:

Parameter/ Scheme Name	5 Year Post Office Time Deposit (POTD)	Senior Citizen Savings Scheme (SCSS)	Sukanya Samriddhi Account (SSA)	Public Provident Fund (PPF)	National Savings Certificate (NSC)
Eligibility	All resident Indians more than 10 years of age can open TD account.	Individuals who are 60 years old and above are eligible. Furthermore, retired individuals between 55 years and 60 years are also eligible.	The girl child must be less than 10 years. Also, Only one account per child.	All resident Indians are eligible to open a PPF account, but guardians can open on behalf of minors.	All resident Indians can open an NSC account.
Lock-In Period	5 Years	5 Years	Till the girl child attains 21 Years	15 Years	5 Years
Interest Rate	6.90% to 7.50% p.a.	8.20% p.a.	8.00% p.a.	7.10% p.a.	7.70% p.a.
Minimum Investment	INR 1,000 and in multiples of INR 100, thereafter.	INR 1,000 and in multiples of INR 1,000 thereafter.	Rs. 250	INR 500	Rs. 100
Maximum Investment	No limit on maximum investment.	INR 5,00,000	Rs. 1,50,000	INR 1,50,000	No limit on maximum investment.
Tax Deduction	Annual investments not more than INR 1.5 lakhs are eligible for tax deduction under Section 80C of the Income Tax Act, 1961.	Investments are eligible for tax deduction under Section 80C of the Income Tax Act, 1961, but only up to INR 1.5 lakhs per annum.	Investments are eligible for tax deduction under Section 80C of the Income Tax Act, 1961, but only up to INR 1.5 lakhs per annum.	Annual investments not more than INR 1.5 lakhs are eligible for tax deduction under Section 80C of the Income Tax Act, 1961.	Investments are eligible for tax deduction under Section 80C of the Income Tax Act, 1961, but only up to INR 1.5 lakhs per annum.
Tax on Interest Income	No tax benefit on interest income.	No tax benefit on interest income.	Tax benefit available on interest income.	Tax benefit available on interest income.	Interest income is exempt from tax.
Premature Withdrawal	No withdrawals are allowed within 6 months from the date of deposit.	Premature withdrawals are allowed. However, only after completing one year.	On the occasion of marriage (once the girl child attains 18 years), partial or premature withdrawals are allowed.	Premature withdrawals after completing 5 years are allowed. However, there are certain rules for such withdrawals.	Premature withdrawals are not allowed.
Early Closure	Allowed, however, attracts a penalty.	Early closures are allowed. However, they attract a penalty.	Not allowed. However, 50% of the corpus amount can be withdrawn for higher education or marriage once the girl child attains 18 years.	Early closures are allowed, however under specific scenarios.	Early closures are allowed, however under specific scenarios.

Explore our article on Section 80P Deduction

Frequently Asked Questions

How to apply for tax saving schemes in the post office?

You can apply for tax savings schemes by visiting the nearest post office. You can directly take the application form from the post office or download it online. All you need to do is fill out the form and submit it along with the necessary documents and deposit the required amount.

What are the risks associated with post office tax saving schemes?

Post office tax saving schemes are risk-free investments as they are backed by the government.

Can I invest in any post office across the country?

Yes, investing in post office schemes is convenient because you can start your investments at the nearest post office.