Tax Savings in FY25, Time Deposit: Post Office’s small savings scheme ‘Time Deposit’ is a good scheme for tax savings. Post Office Time Deposit Account can be opened in any post office in the country.
You can save tax on deposits for 5 years in the scheme. Currently, there are two types of tax regimes in the taxation system. New tax regime and old tax regime. Tax deduction of section 80C can be claimed only in the old tax regime.
Post Office’s Small Savings Scheme is quite popular among Indians due to being risk free and easy. In this, the Post Office Time Deposit Scheme is like the fixed deposit of banks. Post Office Time Deposit Account can be opened in any branch for a period of 1, 2, 3 and 5 years. In this, the benefit of tax deduction can be availed on 5-year deposit.Â
Post Office TD: Current Interest Rates
| Duration | Rate of interest (in percent)Â |
| 1 year | 6.9 |
| 2 years | 7.0 |
| 3 year | 7.1 |
| 5 years | 7.5 |
Post Office TD: Tax exemption up to Rs 1.5 lakh
As per Section 80C of the Income Tax Act 1961, tax deduction of up to Rs 1.5 lakh can be claimed on 5-year deposits. For risk-averse investors, investing in post office fixed deposits is a preferred option.
