Post Office schemes: Investors often choose post office schemes believing they will gain tax advantages. However, not every scheme offers these benefits. Before you decide to invest in post office schemes for tax purposes, take a look at these 5 popular schemes that do not offer 80C benefits.
Post office monthly income scheme
The Post Office Monthly Income Scheme provides monthly earnings through interest on your deposit. At present, the interest rate is 7.4%. The interest received from this scheme is subject to taxation.
Kisan Vikas Patra
Kisan Vikas Patra is a well-known and old scheme offered by the post office. It ensures that your investment doubles in 115 months, providing an annual interest rate of 7.5%. However, this scheme does not provide any tax benefits.
Post Office FD
Post Office FD, also called Post Office TD, offers tenures of 1, 2, 3, and 5 years, each with different interest rates. While there are no tax benefits for 1, 2, and 3-year tenures, a 5-year tenure provides tax benefits under section 80C. This 5-year FD is also known as a tax-free FD.
Mahila Samman Savings Certificate
The Mahila Samman Savings Certificate Scheme is implemented to motivate women to save by providing a higher interest rate. This scheme, with a two-year tenure, offers an interest rate of 7.5%. However, investments in this scheme are not eligible for tax rebates under section 80C of the Income Tax Act.
Post Office RD
The Post Office RD is a well-regarded scheme for making monthly fixed investments. It requires a 5-year investment period and currently offers an interest rate of 6.7%. There are no tax benefits associated with RD, and the interest earned is taxable.
