The Indian Post Office offers a range of savings scheme that allow customers to open small savings scheme accounts and benefit from tax savings while earning favourable returns on their deposits. By investing in these schemes through the post office, taxpayers can claim tax exemptions.
The Post Office tax-saving scheme offers a return of 7% and can help individuals save more on taxes. This scheme is a post office term deposit with several tenure options, and it matures in 5 years.
The interest rates for term deposits range from 6.6% to 7%, depending on the tenure. For instance, the 1-year term deposit offered by the post office has an interest rate of 6.6%, while the interest rate for terms of two and three years is 6.8% and 6.9%, respectively. Simultaneously, the five-year term deposits are earning a 7% interest rate.
The post office offers term deposits for durations of 1, 2, 3, and 5 years, each with its own interest rate. Tax savings can be achieved through the five-year term deposit, which is eligible for exemption under Section 80C of the Income Tax Act of 1961.
Investors can save up to Rs 1.5 lakh in taxes under Section 80C of the Income Tax Act of 1961, which is a popular tax-saving option available through various government schemes. However, it is important to note that only investments made for a period of five years or more are eligible for tax savings.