March 31 deadline: Post Office schemes that can save tax up to Rs 1.5 lakh under Old Tax Regime; details here

March 31, 2025:  In March, it is important to prepare a solid investment and tax-saving plan as the financial year is coming to a close. As the fiscal year 2024-25 draws to a close, individuals adhering to the Old Tax Regime are encouraged to finalise their tax-saving investments by 31 March 2025. Under Section 80C of the Income-tax Act, 1961, taxpayers can claim deductions on investments up to Rs 1.5 lakh.

The Post Office offers several government-backed small savings schemes that qualify for these deductions: Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), Senior Citizen Savings Scheme (SCSS), and Time Deposits. These schemes provide secure investment options with varying returns, making them attractive for tax planning. 

The Post Office Public Provident Fund (PPF) allows contributions up to Rs 1.5 lakh annually, offering a current interest rate of 7.1%. Investments in PPF are tax-deductible, and both the interest earned and maturity amount are tax-free. 

Similarly, the Sukanya Samriddhi Yojana (SSY), focused on the financial security of a girl child, offers an interest rate of 8.2%. Guardians can invest up to Rs 1.5 lakh, claiming this amount under Section 80C. The SSY not only provides financial benefits but also encourages savings for future educational and marriage expenses. 

The National Savings Certificate (NSC) is another viable option for securing deductions under the old tax regime. The NSC offers a five-year maturity period with an interest rate of 7.7%. Although the interest is taxable, it is paid at maturity, allowing investors to benefit from compounded growth. 

The Senior Citizen Savings Scheme (SCSS) caters to those aged over 60, offering an impressive 8.2% interest rate, with a maximum permissible investment of Rs 30 lakh. Both NSC and SCSS are integral to a diversified tax-saving portfolio.

The Post Office also provides a five-year Time Deposit scheme, akin to fixed deposits in banks, currently yielding a 7.5% interest rate. This scheme also qualifies for Section 80C deductions, with the same Rs 1.5 lakh investment cap for tax benefits. 

Collectively, these schemes ensure safety and assured returns, addressing the financial planning needs of various demographics, including senior citizens and families with young children. As government-backed instruments, they offer a reliable alternative to market-linked products, enhancing their appeal amidst economic uncertainties. 

By investing in these Post Office schemes, individuals can effectively manage their tax liabilities while ensuring financial security. These savings instruments are particularly advantageous under the old tax regime, offering both tax benefits and reliable returns. Taxpayers are urged to consider these options before the fiscal year-end to maximise their deductions and secure their financial future within the government-provided frameworks.