Post Office Saving Schemes - Income Tax Benefits

India Post or Department of Posts, which runs the postal network of the country, offers a number of saving schemes with income tax benefits. Using these saving schemes, investor can claim a deduction up to Rs. 1.5 lakh in a financial year from taxable income under Section 80C of the Income Tax Act. Interest rates on these post office saving schemes move in line with the government's interest rates on small savings schemes, which are revised on a quarterly basis.

Post office Benefit Schemes -Tax Benefits

Post office Time Deposite Scheme:

Silent Features Including Tax Benefit:

  1. Account may be opened by individual
  2. Account can be opened by cash /Cheque and in case of Cheque the date of realization of C​heque in Govt. account shall be date of opening of account
  3. Nomination facility is available at the time of opening and also after opening of account
  4. Account can be transferred from one post office to another
  5. Any number of accounts can be opened in any post officeAccount can be opened in the name of minor and a minor of 10 years and above age can open and operate the account
  6. Joint account can be opened by two adults.
  7. Single account can be converted into Joint and Vice Versa
  8. Minor after attaining majority has to apply for conversion of the account in his name
  9. In CBS Post offices ,when any TD account is matured, the same TD account will be automatically renewed for the period for which the account was initially opened . Example​ 2 Years TD account will be automatically renewed for 2 Years. Interest rate applicable on the day of maturity will be applied
  10. The investment under 5 Years TD qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

Senior Citzen Savings Scheme:

Silent Features Including Tax Benefit:

  1. An individual of the Age of 60 years or more may open the account.
  2. An individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and amount should not exceed the amount of retirement benefits.
  3. Maturity period is 5 years.
  4. A depositor may operate more than one account in individual capacity or jointly with spouse (husband/wife). 
  5. Account can be opened by cash for the amount below INR 1 lakh and for INR 1 Lakh and above by C​heque only.
  6. In case of Cheque, the date of realization of Cheque in Govt. account shall be date of opening of account.
  7. Nomination facility is available at the time of opening and also after opening of account.
  8. Account can be transferred from one post office to another
  9. Any number of accounts can be opened in any post office subject to maximum investment limit by adding balance in all accounts.
  10. Joint account can be opened with spouse only and first depositor in Joint account is the investor.
  11. Interest can be drawn through auto credit into savings account standing at same post office, through PDCs or Money Order.
  12. In case of SCSS accounts, quarterly interest shall be payable on 1st working day of April, July, October and January. It will be applicable at all CBS Post Offices.
  13. Quarterly interest of SCSS accounts standing at CBS Post offices can be credited in any savings account standing at any other CBS post offices.
  14. Premature closure is allowed after one year on deduction of an amount equal to1.5% of the deposit & after 2 years 1% of the deposit.
  15. After maturity, the account can be extended for further three years within one year of the maturity by giving application in prescribed format. In such cases, account can be closed at any time after expiry of one year of extension without any deduction.
  16. TDS is deducted at source on interest if the interest amount is more than INR 10,000/- p.a.  Investment under this scheme qualifies for the benefit of Section 80C of the Income Tax Act, 1961 from 1.4.2007.

Public Provident Fund (15 Years Scheme):



Silent Features Including Tax Benefit:


  1. An individual can open account with INR 100/- but has to deposit minimum of INR 500/- in a financial year and maximum INR 1,50,000/-
  2. Joint account cannot be opened.
  3. 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.
  4. Nomination facility is available at the time of opening and also after opening of account. Account can be transferred from one post office to another.
  5. The subscriber can open another account in the name of minors but subject to maximum investment limit by adding balance in all accounts.
  6. Maturity period is 15 years but the same can be extended within one year of maturity for further 5 years and so on.
  7. Maturity value can be retained without extension and without further deposits also.
  8. Premature closure is not allowed before 15 years.
  9. Deposits qualify for deduction from income under Sec. 80C of IT Act.
  10. Interest is completely tax-free.
  11. Withdrawal is permissible every year from 7th financial year from the year of opening account.
  12. Loan facility available from 3rd financial year.
  13. No attachment under court decree order. The PPF account can be opened in a Post Office which is Double handed and above.

National Saving Certificates(NSC)

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