Thinking about using Post Office schemes to save tax? This might surprise you but some schemes DON'T offer tax benefits. Let's have a look at such schemes
Written by - Prathyush Gupta Designed by- Prince Kumar
Photo Credit: Pexels
Thinking about using Post Office schemes to save tax? This might surprise you but some schemes DON'T offer tax benefits. Let's have a look at such schemes. Photo Credit: Pexels
Kisan Vikas Patra (KVP) This scheme is a good fit if you want to grow your money over a fixed period. You invest a lump sum and watch it grow with interest. Photo Credit: Pexels
However, there's a catch: while you'll see your money increase with KVP, the interest you earn is taxable. Additionally, you don't get any tax benefit on the initial investment amount. Photo Credit: Pexels
Post Office Time DepositsIt offer flexibility with terms ranging from 1 to 5 years. Short term depoits - 1, 2, and 3 years don't offer tax benefits, but you'll still earn interest on your deposit. Photo Credit: Pexels
Post Office Monthly Income Scheme (MIS):This scheme is ideal for those seeking a steady flow of income. You invest a lump sum (up to Rs 15 lakh for joint accounts) and receive monthly interest payments. Photo Credit: Pexels
While this provides a predictable income source, it's important to remember that the interest you earn is taxable. Photo Credit: Pexels
Mahila Saman Savings Scheme:This scheme is designed specifically for women to encourage saving habits. You can invest and earn interest on your savings. Photo Credit: Pexels
Similar to MIS, the interest earned under this scheme is subject to tax. So, while it's a good option to grow your savings, keep the tax implications in mind. Photo Credit: Pexels
Post Office Recurring Deposits (RDs):This option is perfect for those who want to inculcate a habit of regular saving. You can start small with monthly deposits as low as Rs. 100 (in multiples of Rs. 10). Photo Credit: Pexels
There's no maximum limit, so you can gradually increase your contributions as you go. However, the interest you earn on your deposits over the 5-year lock-in period is taxable.