These post office saving schemes offer income tax benefits

In a post office time deposit (TD) scheme, one can deposit a lump sum of money for a specific period and avail of features like guaranteed returns and choice of interest payout. The time deposits of one-year, two-year and three-year maturity periods fetch interest at the rate of 5.5 percent.

The five-year time deposit account offers a return of 6.7 percent and it qualifies for the benefit of Section 80C of the Income Tax Act, 1961. The interest is payable annually but calculated quarterly.

Post office public provident fund (PPF) is a retirement planning-focused instrument. This account comes under the 'exempt, exempt, exempt' (EEE) category of tax status, meaning the returns, the maturity amount and the interest income are exempt from income tax. The scheme offers an interest rate of 7.1 percent per annum, which is compounded yearly.

National Savings Certificates, or NSCs are operated by the Department of Economic Affairs. The NSC fetches an interest rate of 6.8 percent per annum. This interest is compounded annually but payable at maturity. Deposits in the National Savings Certificate qualifies for deduction under Section 80C of the Income Tax Act.

Senior Citizen Savings Scheme (SCSS) serves as an investment avenue and helps in generating wealth for a successful retirement life. A person of the age of 60 years or more is eligible for the scheme.

The scheme offers an interest rate of 7.4 percent per annum, which is payable from the date of deposit on March 31/September 30/December 31 in the first instance and thereafter, interest are payable on March 31, June 30, September 30 and December 31. Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961.