Article discusses Rate of Interest, Limit of Investment and Income Tax Benefit from Investment in 8 Most Popular Tax Saving Instruments in India i.e.  1,2,3 and 5 year Time Deposit, 5 Year National Savings Certificates VIII Issue(NSC), 5 Year Post office Recurring Deposit(RD), 15 year Public Provident Fund(PPF), Post office Saving  Bank Account, 7 years Saving Bonds, 5 year Senior Citizen Savings Scheme, Sukanya Samriddhi Account. Tax benefit may be in the form of deduction U/s. 80C or Exemption of Interest from Tax.

Pour Your Taxes into your Investment- Tax Saving

Tax Saving Schemes Available for Assessment Year 2018-19 under Income Tax:

Serial No. Tax Saving Schemes Rate of Interest Limit of Investment Exemption under Income Tax
1. 1,2,3 and 5 year Time Deposit
  • Interest @6.6%, 6.7%, 6.9% and 7.4% per annum (Calculated at quarterly compounding basis)
  • Minimum Amount-Rs. 200
  • No Maximum Deposit Limit
  • Minor can also open the time deposit.
  • Interest is chargeable to tax.
  • Investment in 5 year time deposit scheme will qualify for deduction under 80C
2. 5 Year National Savings Certificates VIII Issue(NSC)
  • Interest @ 7.6% per annum, Compound yearly
  • Payable on Maturity
  • No limit on deposit.

 

  • Interest is chargeable to tax on accrual basis.
  • Investment and interest accrued  in first 4 year will qualify for deduction under 80C
3. 5 Year Post office Recurring Deposit(RD)
  • Interest @ 6.9% per annum, compounded quarterly
  • Payable on Maturity.
  • Minimum Amount-Rs. 10 per month.
  • Interest is chargeable to tax.
4. 15 year Public Provident Fund(PPF)
  • Interest 7.6% per annum(Compounding annual basis)
  • Payable on Maturity.
  • Minimum Amount-Rs. 500
  • Maximum- Rs. 1,50,000 in every financial year
  • Interest is total exempt under section 10.
  • Investment will qualify for deduction under 80C

 

5. Post office Saving  Bank Account Interest @ 4% per annum.
  • Minimum Amount-Rs. 20
  • Maximum – Rs. 1, 00,000 for individual and Rs. 2,00,000 for Joint Account.
  • Interest is exempt up to Rs 3,500 for Individual and Rs. 7,000 for Joint Account.
6. 7 years Saving Bonds
  • 7.75% Interest
  • Payable Half yearly and compounded in rest half yearly.
  • No Minimum and Maximum Limit.
  • Interest is chargeable to tax.
7. 5 year Senior Citizen Savings Scheme
  • Interest @ 8.3% per annum payable quarterly.
  • Maximum- Rs. 15 Lakh
  • Interest is chargeable to tax.
  • Investment will qualify for deduction under 80C
8. Sukanya Samriddhi Account Interest @ 8.1% per annum, compounded yearly.
  • Minimum Amount-Rs. 1,000
  • Maximum- Rs. 1,50,000 in every financial year
  • Interest is total exempt under section 10.
  • Investment will qualify for deduction under 80C

Warm Regards,

Rahul Grover

info@raagconsultants.com

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