The Indian Postal Service offers a wide range of post office tax saving schemes, which provide tax-saving benefits. The schemes are backed by the Government of India and offer guaranteed returns and competitive interest rates.
Here is top post office tax saving scheme that you must know:
Table of Contents
Post Office Savings Account – Post Office Tax Saving Scheme
Post Office Savings Account can be opened by a single adult, two adults only (Joint A or Joint B), a guardian on behalf of minor, a guardian on behalf of person of unsound mind ​, or a minor above 10 years in his own name.
At the time of closure of account, interest will be paid up to the preceding month in which account is closed under section 80TTA of the Income Tax Act, from all Savings Bank Accounts, interest up to Rs. 10,000 earned in a Financial Year is exempted from taxable Income.
It is worthwhile to note that only one account can be opened by an individual as a single account. Only one account can be opened in the name of minor/above 10 years of age (self)/person of unsound mind. In case of death of a Joint holder, the surviving holder will be the sole holder, if surviving holder already has single account in his/her name, Joint account have to be closed. Conversion of single to joint account or vice versa is not allowed. Nomination is mandatory at the time of opening of account
Minor after attaining majority has to submit fresh account opening form and KYC documents of his/her name at concerned Post Office for conversion of the in his/her name
All deposits/ withdrawals shall be in whole rupees only. The Minimum deposit amount is Rs. 500 (subsequent deposit not less than 10 rupees) and the minimum withdrawal amount: – Rs. 50. There is no maximum limit for maximum deposit. No withdrawal will be permitted which effect reducing of minimum balance Rs. 500. In case account balance not raised to Rs. 500 at the end of financial year Rs. 50 will be deducted as Account Maintenance Fee and if account balance became Nil the account shall stands automatically closed.
Interest will be calculated on the basis of minimum balance between 10th of the month and end of the month and allowed in whole rupees only. No interest will be allowed in a month if balance between 10th and last day of the month falls below Rs. 500. Interest shall be credited in account at the end of each Financial Year at the interest rate prescribed by Ministry of Finance.
National Savings Time Deposit Account (TD) – Post Office Tax Saving Scheme
Account type for 1 year, 2 year, 3 year, 5 year. Account can be opened with a minimum of Rs. 1000 and in multiple of Rs. 100. No maximum limit for investment. Interest shall be payable annually, No additional interest shall be payable on the amount of interest that has become due for payment but not withdrawn by the account holder.
(iv)The annual interest may be credited to the savings account of the account holder by submitting an application. The investment under 5 year TD qualifies for the benefit of section 80C of Income Tax Act, 1961.
Senior Citizens Savings Scheme Account (SCSS) – Post Office Tax Saving Scheme
Senior Citizens Savings Scheme Account can be opened by an individual above 60 years of age, Retired Civilian Employees above 55 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits, Retired Defense Employees above 50 years of age and below 60 years of age, subject to condition that investment to be made within 1 month of receipt of retirement benefits, Account can be opened as individual capacity or jointly with spouse only, or the whole amount of deposit in a joint account shall be attributable to the first account holder only.
Minimum deposit shall be Rs. 1000 and in multiple of 1000, subject to maximum limit up to Rs. 30 lakh in all SCSS accounts opened by an individual.
In case any excess deposit made in SCSS account, excess amount will be refunded immediately to the depositor and only PO Savings Account Interest rate will be applicable from the date of excess deposit to the date of refund. Investment under this scheme qualifies for the benefit of section 80C of Income Tax Act, 1961.
Interest is taxable if total interest in all SCSS accounts exceeds Rs.50,000/- in a financial year and TDS at the prescribed rate shall be deducted from the total interest paid. No TDS will be deducted if form 15 G/15H is submitted and accrued interest is not above prescribed limit.
Public Provident Fund Account (PPF )
Public Provident Fund Account (PPF) can be opened by a single adult by a resident Indian or a guardian on behalf of minor/ person of unsound mind. ​Minimum deposit Rs. 500 in a Financial Year and Maximum deposit is Rs. 1.50 lakh in a FY. Maximum limit of Rs. 1.50 lakh shall be inclusive of the deposits made in his/her own account and in the account opened on behalf of minor.
Amount can be deposited in any number of installments in a FY in multiple of Rs. 50 and maximum up to Rs. 1.50 lakh. Account can be opened by cash/cheque and in case of cheque the date of realization of cheque in Govt. account shall be date of opening of account/subsequent deposit in account. Deposits qualify for deduction under section 80C of Income Tax Act.
Sukanya Samriddhi Accounts
Sukanya Samriddhi Accounts can be opened by the guardian in the name of girl child below the age of 10 years. Only one account can be opened in India either in Post Office or in any bank in the name of a girl child. This account can be opened for maximum of two girls in a family. Provided in case of twins/triplets girls birth more than two accounts can be opened. Deposits qualify for deduction under section 80C of Income Tax Act.
