Investment in Post Office FD for Tax Savings for A.Y. 2022-23 & 2023-24

Investment in Post Office FD for Tax Savings

The Government of India’s Department of Posts, Ministry of Communications, offers fixed deposit accounts that oiler attractive interest rates with tenures that range from 1 year up to 5 years. The interest is payable annually with the minimum deposit being Rs.1,000 and no maximum limit.

Post Office Fixed Deposit Rates

Deposit Tenure Post Office FD Rates (P.a.)
1 Year 5.50%
2 Year 5.50%
3 Year 5.50%
4 Year 6.70%

Post Office Time Deposit Account

The post office Time Deposit (TD) Account, also known as the post office Fixed Deposit (FD) account, can be opened with a minimum of Rs. 1,000 in multiples of Rs. 100, with no maximum limit.

Features of Post Office Fixed deposit

  • Account can be transferred from one post office to another anywhere in the country.
  • Any number of accounts can be opened in any post office anywhere in the country.
  • A single account can be converted into a joint account and vice versa.
  • Nomination facility is available at the time of opening the account and afterwards too.
  • Account can be opened by cheque or cash.
  • Minimum amount is Rs. 1,000.
  • There is no maximum limit to the deposit.
  • A minor’s account has to be convened after attaining majority.
  • The tenure can he extended by making an application.
  • Interest is payable annually.
  • Interest is credited into the holder’s savings account.
See also  Investment in Public Provident Fund (PPF) for A.Y. 2022-23 & 2023-24

Who can open a Fixed Deposit Account?

A Time deposit account with India Post can he opened by:

  • A single adult
  • Maximum of three adults (in the case of a joint account)
  • A minor who is above 10 years of age
  • A guardian on behalf of an individual who is a minor or a person of unsound mind

Premature Withdrawal of Post Office FD

Premature withdrawal of a Post Office FD or Term Deposit can be made between 6 months to 1 year of the date of opening the account. However, if withdrawal is not allowed before 6 months from the date of opening the account.

TDS Deduction on Post Office FD

You can avail a tax deduction under Section 80C of the Income-tax Act, 1961. for deposits with a tenure of 5 years. This rule is applicable from 1 April 2007.

Rates for Tax-Saving Post Office 5-year Fixed Deposit

If you open a fixed deposit with the post office for a tenure of 5 years. you will be eligible to claim tax benefits under Section 80C of the Income-tax Act., 1961.

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