Avail Tax benefits With Small Savings: Know How To Earn With Section 80C

What are small saving investments?

Small-saving instruments sold by India Post as well as banks. They offer a lot of benefits including tax breaks, besides guaranteed returns, which is their chief draw.

Senior citizens savings scheme (SCSS)

The SCSS scheme offers a current rate of interest of 8.2 percent per annum, which is open to individuals over 60 years and payable every quarter. Interest is taxable if total interest in all SCSS accounts exceeds Rs 50,000 in a financial year. - Open to individuals over the of 60 years (55 years in the case of retired civilian employees and 50 years in the case of defence employees)

Public provident fund

PPF has a current rate of interest of 7.1 percent per annum. The interest earned on PPF is tax-free. The minimum investment amount is Rs 500 in a financial year, while the maximum is Rs 1.5 lakh.

Sukanya Samriddhi Account (SSA)

In SSA, the current rate of interest is 8.2 percent per annum. Here, only parents or guardians of girls up to the age of 10 years can enroll. The interest earned on SSA is tax-free.

Five-year National Savings Certificates (NSC)

In NSC, the current rate of interest is 7.7 percent compounded annually, payable at maturity. Here, Interest earned is taxable. The minimum deposit of Rs 1,000 and in multiples of Rs 100 subsequently. There is no maximum limit of investment here.

Five-year National Savings Time Deposits

This deposit is eligible for a tax deduction of up to Rs 1.5 lakh under section 80C. Here, the interest earned is taxable, the minimum investment is Rs 1000 with no maximum limits.

Why the choice of Retail Investos?

Lower minimum investment requirements and ease of access are the major reasons why they remain the instruments of choice for many retail investors.