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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.

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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:

  1. 5 Year Post Office Time Deposit (POTD)
  2. Senior Citizen Savings Scheme (SCSS)
  3. Sukanya Samriddhi Account (SSA)
  4. Public Provident Fund (PPF)
  5. National Savings Certificate (NSC)

5 Year Post Office Time Deposit (POTD)

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)

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 Account (SSA)

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)

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)

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.

Comparison Between Post Office Tax Saving Schemes

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

Parameter/ Scheme Name5 Year Post Office Time Deposit (POTD)Senior Citizen Savings Scheme (SCSS)Sukanya Samriddhi Account (SSA)Public Provident Fund (PPF)National Savings Certificate (NSC)
EligibilityAll 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 Period5 Years5 YearsTill the girl child attains 21 Years15 Years5 Years
Interest Rate6.70%7.40%7.60%7.10%6.80%
Minimum InvestmentINR 1,000 and in multiples of INR 100, thereafter.INR 1,000 and in multiples of INR 1,000 thereafter.Rs. 250INR 500Rs. 100
Maximum InvestmentNo limit on maximum investment.INR 5,00,000Rs. 1,50,000INR 1,50,000No limit on maximum investment.
Tax DeductionAnnual 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 IncomeNo 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 WithdrawalNo 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 ClosureAllowed, 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.