Avail tax benefits from small savings schemes:
Here are the various Small Savings Schemes that ensures Tax Benefit:
Time Deposit Account: Time Deposit Account can be opened in four time-bound terms — 1-year, 2-year, 3-year and 5-year. An individual can open this account with a minimum amount of Rs 200 and in multiple thereof., with no maximum limit. The investment under 5-year time deposit qualifies for the benefit under Section 80C of the Income Tax Act, 1961.
Public Provident Fund Account: An investment scheme where an individual can open account with Rs 100 but has to deposit minimum of Rs 500 in a financial year and maximum of Rs 1.5 lakh. Deposits can be made in lump-sum or in 12 equal instalments. Deposits qualify for deduction from income under Section 80C of the Income Tax Act, 1961. Moreover, interest earned is completely tax-free.
National Savings Certificates (NSC) (VIII Issue): This hugely popular scheme has been specially designed with income tax benefits for both salaried professionals and businessmen. Under this scheme, there is no tax deduction at source and investment up to Rs 1 lakh per annum qualifies for income tax rebate under Section 80C of the Income Tax Act, 1961.
Senior Citizen Savings Scheme (SCSS) Account: Under this scheme, there shall be a single deposit in the account in multiple of Rs 1000 up to maximum of Rs 15 lakh. The basic criteria for opening this account is the age of the account holder be 60 years or more. However, an individual of the age of 55 years or more but less than 60 years who has retired on superannuation or under VRS can also open account subject to the condition that the account is opened within one month of receipt of retirement benefits and amount should not exceed the amount of retirement benefits. TDS is deducted at source on interest if the interest amount is more than Rs 10,000 per annum. Investment under this scheme qualifies for the benefit under Section 80C of the Income Tax Act, 1961.
Sukanya Samriddhi Account: It is a saving scheme specially designed for the parents of a girl child. The scheme was launched by Prime Minister Narendra Modi in January 2015, as a part of the Beti Bachao, Beti Padhao campaign. Returns from this scheme will be fully exempt from income tax under Section 80C of the Income Tax Act, 1961.