As the financial year 2024-25 nears its conclusion, taxpayers under the old tax regime must ensure their investments are completed by March 31, 2025, to avail of tax benefits.
Investing in Post Office savings schemes provides an excellent opportunity to earn attractive returns while securing tax exemptions of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. With the financial year ending soon, now is the time to invest and maximize tax savings. Below are the top five Post Office schemes offering these benefits. However, it is important to note that tax benefits under Section 80C are available only under the old tax regime, not the new system.
PPF is a long-term savings option that ensures tax exemptions under Section 80C. Investors can start with a minimum of Rs 500 and deposit up to Rs 1.5 lakh annually to claim tax benefits. For the quarter from January to March 2025, the interest rate on PPF is set at 7.1%.
NSC is a low-risk investment that offers guaranteed returns along with tax benefits. Investments starting from Rs 1,000 are accepted, with no upper limit. Contributions up to Rs 1.5 lakh annually are eligible for tax deductions. For the January-March 2025 quarter, the interest rate on NSC is 7.7%, compounded annually and payable at maturity.
Designed exclusively for girls' financial security, SSY provides high returns and tax benefits. Investors can contribute between Rs 250 and Rs 1.5 lakh annually, with the entire amount qualifying for tax exemption under Section 80C. Additionally, both interest earned and maturity proceeds are tax-free. The current interest rate for the January-March 2025 quarter stands at 8.2%.
SCSS is a government-backed retirement savings plan that offers both substantial returns and tax benefits. Investments can range from Rs 1,000 to Rs 30 lakh, with up to Rs 1.5 lakh eligible for tax deductions under Section 80C. The interest rate for the January-March 2025 quarter is set at 8.2% per annum.
A 5-year Post Office Time Deposit allows investments up to Rs 1.5 lakh to qualify for Section 80C deductions, though the interest earned remains taxable. The scheme requires a minimum investment of Rs 1,000, with no upper limit. The interest rate for a 5-year POTD for the January-March 2025 quarter is 7.5%, calculated quarterly and paid annually.
Investing in these Post Office savings schemes not only ensures financial growth but also offers significant tax benefits. As the financial year draws to a close, individuals opting for the old tax regime should consider these schemes to optimize their savings and tax liabilities. Ensure timely investments before March 31, 2025, to maximize these benefits.
