The government revises the interest rates of small savings schemes every quarter. After the amendment, the interest rates on two schemes of the post office have become very attractive.
From investment point of view, small savings schemes of post office are very popular among rural and small investors. The government has also introduced schemes for all sections of the society under Small Saving Schemes.
Some of the schemes being offered for different categories under Post Office Schemes are –
- Sukanya Samriddhi for girls,
- Mahila Samman for women investors
- Senior Citizens (SCSS) for senior citizens, –
- PPF for long term investors. , KYC, NSC
- Fixed Deposits and RDs for short-term investors
Which scheme has the highest interest?
The government revises the interest rates of small savings schemes every quarter. For this quarter, the maximum interest rate on Senior Citizens Savings Scheme is 8.2% and Sukanya Samriddhi Yojana is 8%.
TDS on interest
The post office offers many long term and short term investment schemes. However, all these investment schemes are not tax-free. For example, interest paid on some post office schemes is taxable, and Section 80C of the Income Tax Act, 1961 does not allow deduction.
What is TDS?
Tax deducted at source’ is called TDS. It is designed to take tax payment directly from the source of an individual’s income. TDS is a mechanism used by the government to collect taxes so that the revenue (in whole or in part) can be collected immediately rather than earned later in order to reduce tax evasion.
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