Post Office Tax Saving Schemes

Post office tax saving schemes are among the top investment options for risk-averse investors. These schemes, offered by India Post across the country, also provide income tax benefits under various sections of the Income Tax Act of India, 1961. 


As the Government of India provides a sovereign guarantee on these schemes, you can be assured of returns on your investment. Available for every Indian citizen, these schemes offer numerous benefits, making them a popular investment choice.


Among the many post office tax saving schemes is the Post Office Tax Saving FD. With the Tax Saver FD, you get a tax exemption per Section 80C of the Income Tax Act. Read on to learn more about the Tax Saving FD by the post office.

List of Post Office Tax Saving Schemes

Here is a list of Post office tax saving schemes you must know:

  • Post Office Time Deposit

  • National Savings Certificate (NSC)

  • Sukanya Samriddhi Yojana (SSY)

  • Senior Citizen Savings Scheme (SCSS)

  • Public Provident Fund (PPF)

Different Types of Post Office Tax Saving Schemes

There is a diverse range of tax saving investment options offered by Indian post offices. Each of these has unique perks that help you save money and invest efficiently. As such, they cater to the needs of most investors of all ages. 

Here is a detailed look into these tax saving schemes.

1. 15-Year Public Provident Fund (PPF)

The Public Provident Fund (PPF) is among the trusted tax saving schemes, allowing you to enjoy tax benefits under Section 80C. As per the limits stipulated in the section, you can avail a maximum of ₹1.5 Lakhs as a deduction. 


However, remember that this limit is the total limit for all the tax-saving investments that fall under the section. In PPF, you can deposit a minimum amount of ₹500 and a maximum of ₹1,50,000.


It is a long-term investment option offered for a 15-year period, which you can extend by 5 years. You can withdraw your funds only after five years, which is subject to conditions like higher education, change of residence or life-threatening disease. That being said, you can make a partial withdrawal after 7 years and can get a loan against the deposit after 4 years. To keep your account active, deposit at least ₹500 in a financial year. If your account is inactive, you can re-activate it by depositing the minimum requirement for every inactive year.


The interest rate for a PPF does change and is compounded annually. So, be sure to check the current rate before investing. The current PPF rate of interest is 7.1% per annum.  One of the interesting features of PPF is that the interest you earn on it is completely tax free.

2. National Savings Certificate (NSC)

This tax saving scheme comes with a tenor of 5 years, with interest being compounded annually. While the minimum investment is ₹1,000, there is no maximum limit. After this, investments can be made in multiples of ₹100. NSC can be bought by an adult, minors above the age of 10 years, jointly by three adults, an adult on behalf of an underage individual and a guardian on behalf of an individual of unsound mind. The current NSC rate of interest is 7.7% per annum. Do note that, like the PPF, the interest rate changes, and you should check before investing.


Like the post office FD tax saver scheme, your investment in NSC has to be in a lump sum. After the NSC matures, you get the total corpus invested, including the principal amount and the interest earnings.


While the interest you earn from the NSC at maturity is taxable, the investment amount qualifies for a tax deduction under Section 80C. 


You are allowed to open multiple accounts under the National Savings Certificate Scheme. 

The certificate can also be pledged or transferred as security. 


Ideally, you should compare the features of the post office tax saving FD with NSC before deciding on the best investment option to go with.

3. Sukanya Samriddhi Account (SSA)

This is a government scheme dedicated to the financial welfare of a girl child. SSA accounts can be opened for girl children below 10 years of age. This plan has a tenor of 21 years irrespective of the age of the girl child at the time of opening an account.  For example: In case the girl is 8 years old at the time of opening the account, the SSA account will mature when the girl reaches 29 years of age. The tax benefits of this scheme are as per Section 80C. The minimum deposit amount is ₹250, and the maximum is ₹1.5 Lakhs for every financial year. 


The prevailing interest rate offered for the scheme is 8%. Only investments up to ₹1.5 Lakhs are eligible for tax benefits. The interest amount as well as the maturity amount of this scheme are exempt from taxation under the Income Tax Act.


Only girls under 10 can avail the benefits of this scheme, and regardless of their age, the tenor of the scheme is 21 years. Parents or guardians operate the account on behalf of the girl. Guardians can manage the account until the child turns 18. 

4. Senior Citizens Savings Scheme (SCSS)

This is a retirement scheme for people above 60 years of age. Retired defence employees between 55 to 60 years can also open an account. If you are aged between 50 and 60 years, you can also invest in this scheme, provided you have retired or opted for voluntary retirement. The tenor of this scheme is 5 years


You can open a joint account with your spouse and make a lump sum investment in the scheme. The minimum deposit requirement is ₹1,000, while the maximum is ₹15 Lakhs. 

Currently, the interest rate offered under the scheme is at 8.2% p.a., and it is reviewed every quarter. 


While you can avail tax benefits according to Section 80C, the interest income is liable for TDS if it exceeds ₹50,000.


If you want to avoid TDS deductions, you can submit Form 15H. The form is a self-declaration, which states that your income falls under the taxable threshold. Also, the issuer will not deduct TDS if your interest earnings for the financial year are under ₹50,000.

5. Post Office Time Deposit Account (POTD/TD)

This scheme works similarly to regular fixed deposits, hence it is also known as the Post Office Fixed Deposit. It can also be referred to as a post office time deposit. You can refer to the Post Office 5-year FD as a tax saving FD as well. 


In fact, due to its tax benefits, it is one of the more popular post office schemes. The tax benefits of this scheme fall under Section 80C of the Income Tax Act. Under this section, you can avail a maximum deduction of ₹1.5 Lakhs. 


However, this upper limit includes multiple investment avenue eligible for tax benefits under the section. So, plan your investment in a post office tax saving FD and other suitable instruments accordingly.


Apart from Section 80C, you can also avail deductions on tax on post office FDs for the interest earned under Section 80 TTB. Under this section, the post office tax saver FD interest rate earnings are exempt from TDS if they are under ₹50,000 for the financial year. This applies to senior investors. 


Overall, investing in a Post Office Tax Saving FD has benefits similar to other post office tax saving schemes. 


You can also invest in Post Office FDs for various other tenors of 1, 2 and 3 years. The minimum deposit amount for such FDs is ₹1,000, and there is no maximum limit for investment. 


FD interest rates for post office schemes range from 6.8% to 7.5%, depending on the tenor. You can expect the interest to be transferred annually but compounded every quarter. 


This way you can enjoy lucrative returns. In addition, you can use the online fixed deposit interest calculator to get a better understanding of the payout that you can expect from this FD.

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A Comparative Study of Post Office Schemes for Tax Exemption

Post Office Tax Saving Schemes

Tenor (in years)

Interest Rate (% p.a.)

                      Tax Benefits

Principal Amount

Interest Earnings

Maturity Amount

Post Office Time Deposit



Not Available

Not Available

National Savings Certificate (NSC)




Not Available

Sukanya Samriddhi Yojana (SSY)






Senior Citizen Savings Scheme (SCSS)



Not Available

Not Available

Public Provident Fund (PPF)






Disclaimer: The rates mentioned above are applicable until June 2023, and are subject to changes and revisions thereafter. Check the current rates before you invest.

Advantages of Post Office Tax Saving Schemes

One of the prominent advantages of investing in these post office schemes is that their attractive interest rates go up to 8.2% p.a. Moreover, the interest rates of these government-backed schemes remain unaffected by market volatility for the stipulated time.


So, not only do these schemes assure you of secure returns, but they also keep your wealth safe from market fluctuations. Moreover, the minimum deposit requirements and simple eligibility of schemes, such as the post office tax saver FD, make it a popular choice. 


Additionally, minimal documentation, quick and easy online process makes it easy for you to invest at any time from anywhere. With post offices all over India, you can open an account even if you reside in remote areas.

Post Office Tax Savings Scheme - Eligibility Criteria

With simple eligibility parameters and an easy application process, investing in post office tax saving schemes is hassle free. Here are the eligibility criteria you have to meet:

  • Applicable for individuals above 18 years

  • Indian national

  • Minors can open an account with a guardian


You can also enjoy the facility to open a joint account with two to three adults. 

How to Apply for Post Office Tax Saving Schemes

You can download the application forms for most of the tax saving schemes offered by the post office at the official India Post website. To apply for post office tax saving schemes, follow the steps mentioned below. 

  • Step 1: Visit the official India Post website at

  • Step 2: Download and take a printout of the relevant application form

  • Step 3: Fill in the application form and review the details for accuracy

  • Step 4: Attach all the essential documents

  • Step 5: Submit the form with documents at the nearest PO branch


You can also apply for these schemes online by creating a retail account on the website and following the instructions. 

Who Should Apply for the Post Office Tax Saving Schemes?

These schemes are ideal for you if you are looking to securely grow your corpus and earn assured returns while saving on taxes. With negligible financial risks and an affordable minimum investment amount, such schemes are perfect to inject stability into your portfolio. 


These schemes best suit you if you are keen on investing in a risk-free financial instrument. Make sure you check and compare all the features and benefits of these schemes to pick an instrument that is right for your current and future goals.


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The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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FAQs on Post Office Tax Saving Schemes

What are post office tax saving schemes?

Offered by the Department of Posts, these schemes offer tax benefits under various sections of the Income Tax Act. They also ensure secure financial growth with stable returns.

What is the post office savings scheme for tax benefit?

There are multiple tax saving schemes offered by the India Post. The tax benefits of these schemes are as per various sections of the Income Tax Act. 


These schemes include the Public Provident Fund, National Savings Certificate, Sukanya Samriddhi Account, Senior Citizen Savings Scheme (SCSS), Post Office Savings Account and 5-year Time Deposit.

How much interest will be earned on the Post Office Tax Saving Scheme?

The interest earnings for these schemes depend on the scheme you invest in, the tenor, and the prevailing interest rate. Currently, the interest rate for these schemes goes up to 8.2%.

Are there any online facilities available for these schemes in post offices?

Yes, online facilities are available as the India Post has upgraded its operation and services. You may now operate and access your accounts online.

Do these Post Office Tax Saving Schemes come with any market-related risks?

No, these schemes are independent of market fluctuations as they are supported by the government.

Is it possible to invest in Post Office Tax Saving Schemes at any post office throughout the country?

Yes, you can invest in any of these schemes from anywhere across India.

What are the tax exemptions on post office saving schemes?

As per Section 80C of the Income Tax Act, all investments up to ₹1.5 Lakhs qualify for tax benefits. Tax benefits on the maturity amount and interest earnings vary from one scheme to another.

Is post office FD tax free?

While FD investment up to ₹1.5 Lakhs is exempt from tax, you can enjoy tax benefits on interest earnings if they are under ₹50,000 for the financial year.

Is the post office 5-year FD tax free?

No, the interest earned on a post office 5-year fixed deposit (FD) is taxable. However, the deposit amount is eligible for tax deduction under Section 80C of the Income Tax Act. You can invest up to a maximum limit of ₹1.5 Lakhs per financial year to enjoy the exemption.

Which post office scheme is best for tax saving?

Schemes you can consider investing in for saving taxes are the Post Office Time Deposit (TD), SCSS, NPS, and Post Office Public Provident Fund (PPF). 

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