- Date : 15/02/2023
- Read: 4 mins
Post office schemes that help save tax under Section 80C

Section 80C of the Income Tax Act allows investors to claim a tax deduction on their taxable income and lower their tax liability. A deduction of up to Rs.1.5 lakhs is allowed for investing in eligible avenues or incurring eligible expenses.
When it comes to investment, five post office schemes fall under the purview of Section 80C and allow tax-saving benefits. Here’s a look at these five schemes –
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National Savings Time Deposit Account
This a fixed deposit scheme offered by the post office. Though the account offers a tenure of 1, 2, 3 and 5 years, the 5-year deposit attracts tax benefits under Section 80C. You can claim a deduction on the amount invested into the Post Office Time Deposit Account. Other features of the account are as follows –
- The minimum investment is Rs.1000, and there’s no maximum limit.
- The interest rate is 7%, payable annually but calculated quarterly.
- You can extend the maturity tenure by another 18 months.
- Interest earned is taxable in your hands at your slab rates. However, senior citizens can claim a deduction on the interest income, up to Rs.50,000, under Section 80TTB.
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5 Years National Saving Certificate (NSC)
The NSC is also a tax-saving scheme which allows the invested amount as a deduction under Section 80C. The interest you earn during the deposit tenure is also allowed as a deduction under Section 80C because it is reinvested. However, on maturity, the returns earned are taxed in your hands.
The features of the scheme are as follows –
- The term is 5 years.
- The minimum investment amount is Rs.1000. There’s no limit on the investment amount.
- The interest rate is 7% per annum, payable quarterly from 1st January 2023.
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Sukanya Samriddhi Yojana (SSY)
This saving scheme is meant to create a secured corpus for the girl child. It is available to parents or guardians of a girl child aged below 10 years. The investment into the SSY scheme qualifies for an 80C deduction. Moreover, the interest earned and the maturity proceeds are also completely tax-free.
Here are the scheme’s salient features –
- The minimum investment amount is Rs.250 with multiples of Rs.50 thereafter. The maximum investment amount is restricted to Rs.1.5 lakhs in a financial year.
- You are required to make a deposit every financial year. Any number of deposits can be made in a year.
- The account runs for 21 years or till the girl child gets married after attaining 18 years of age, whichever is earlier.
- The interest rate is 7.6% per annum compounded annually.
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Senior Citizen Saving Scheme (SCSS)
This saving scheme is for senior citizens, i.e., individuals aged 60 years and above. However, individuals above 50 can also invest if they fulfil the prescribed eligibility criteria.
Senior citizens can make a lump sum investment from the retirement benefits received and enjoy regular quarterly incomes in interest payments. Other features include the following –
- The minimum investment amount is Rs.1000, and the maximum is Rs.30 lakhs.
- The interest rate is 8% per annum, payable quarterly.
- The maturity tenure is 5 years.
- Interest income up to Rs.50,000 is tax-free. However, if the income exceeds this limit, the tax will be applicable at the applicable slab rates.
- Public Provident Fund (PPF)
The post office also offers the PPF scheme and allows you to create a tax-efficient corpus. The investment qualifies for a deduction under Section 80C. Moreover, the interest earned and the redemption proceeds are also fully tax-free. Other features are as follows –
- The minimum investment amount is Rs.500, and the maximum is Rs.1.5 lakhs.
- One investment is required every year after the PPF account is opened.
- The tenure is 15 years which can be further extended in blocks of 5 years.
- The interest rate is 7.1% per annum.
Related - Find out which scheme is better - SCSS, PPF or SSY
Take your pick from these schemes and utilize the 80C deduction fully. These schemes help you save tax and protect your investments against market volatility. So, if you are looking for fixed-income avenues that also save tax, you cannot go wrong with these post office schemes.
Related - Read why the post office monthly income scheme is a good investment choice.