Many people invest in small savings plans to get a good return with low risk. Moreover the government guarantee gives a relief. Apart from this there are many other benefits available on these schemes including tax deduction. The Post Office Savings Account is one such scheme. With this account you can save tax up to Rs.13,500 per year.
If the post office savings account is in joint form then your total tax savings limit is up to Rs.17,000. This is an additional tax benefit available to post office savings customers. They can claim deductions when filing an income tax return (ITR).
Interest Rate In Post Office Small Savings Scheme
Post office savings account earns more interest than banks. Interest is paid at the rate of about 3 percent on savings accounts in the banks. The post office savings account pays interest at the rate of 4%. Post office savings account earns one-third as much interest as the banks.
Benefit from tax savings along with higher interest is the biggest benefit for post office scheme customers. Low risk taking investors are advised to save in a post office savings account to get higher interest compared to the banks and also tax rebate of Rs. 13,500.