Post Office Scheme: There are many such schemes of the post office which are quite popular. There is no risk of any kind in investing in these schemes. Lakhs of people like to invest in the schemes of the post office. If you are considering investing in government schemes without taking risk in the stock market or mutual funds and are looking for an investment option like SIP, in which the risk is almost zero, then Post Office’s Recurring Deposit can prove to be right for you. You can start investing in this scheme with just Rs 100. There is no maximum limit.
Anyone can plan to invest under the Post Office RD scheme. A minor can also open an account in it. Any minor aged 10 years can open an account with the help of his/her parents. After completing 18 years, the minor will have to fill a new KYC and fresh opening form. This account can be opened through mobile banking or e-banking facility. 6.7 percent interest is available under this scheme.
The first monthly deposit will be made at the time of opening the account and such deposit amount will be equal to the denomination of the account. If the account is opened before the 16th day of a calendar month, the next deposit amount equal to the first deposit amount will be made by the 15th day of every month and if the account is opened after the 16th day and the last working day of a calendar month, the deposit will be made between the 16th day and the last working day of every month.
Maturity of five years
If you open an account under RD scheme, then the maturity of your account will be completed in 5 years. If you want, you can extend it by 5 more years. Apart from this, if you want to close it in between, then you can close it after 3 years of opening the account. If the account holder dies, then the nominee can claim it. Also, if the nominee wants, he can continue it.
Tax rules on RD
Investment in post office RD is eligible for tax deduction up to Rs 1.5 lakh per annum under section 80C of the Income Tax Act, 1961. However, TDS rules apply on interest income, which means you will have to pay TDS. If you are earning more than 10 thousand rupees per annum from interest, then you will have to pay 10 percent tax, but if you are not able to provide PAN, then this tax will be applicable at 20 percent.
How to get the benefit of 35 lakhs?
If you invest 50 thousand rupees every month in this scheme of the post office, then in 5 years you will deposit 30 lakh rupees. Apart from this, on the basis of 6.7 percent interest per annum, you can earn Rs 5,68,291 in 5 years, which will come under TDC deduction. In this way, you will get a total of Rs 35,68,291 in five years.