Tax Savings in FY25, Time Deposit: 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.
Tax Savings in FY25, Time Deposit: Post Office’s small savings scheme ‘Time Deposit’ is a better scheme for tax savings. Post Office Time Deposit Account can be opened in any post office in the country. In the scheme, you can save tax on deposit for 5 years. 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 Small Savings Scheme is very popular among Indians due to being risk free and easy. In this, the time deposit scheme of the post office 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.
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.
Account can be opened online as well as offline through post office netbanking. Post Office Time Deposit Account can be opened singly or jointly (up to 3 members). It can be transferred from one post office to another. Minors can open an account under a legal guardian. More than one account can be opened in any post office. There is a nomination facility in the account.
There is a facility to withdraw money from POTD account before time or before maturity. This is called pre-mature withdrawal. According to the rules, pre-mature withdrawal can be done after 6 months from the date of opening the account. If withdrawal is done between 6-12 months from the date of opening the account, then interest will be given based on the rates of Post Office Savings Account.
Post Office TD: Know this also
- Post Office Time Deposit Account can be opened with a minimum of Rs 1,000. After this, you can deposit as much as you want in multiples of Rs 100.
- If the money is not withdrawn after maturity, no interest is paid on the deposited amount during that period.
- The account should be changed in the name of the minor after he/she turns 18 years old.
- If the deposit is made through cheque, the date of receipt of the cheque will be the starting date of TD and interest will be calculated from this date only.
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