POST OFFICE TIME DEPOSIT ACCOUNT
• An individual can open only one account besides his GPF account.
• Option to pay each contribution in one Iumpsum p.a. or in 12 installments.
• Period: 15 yrs.(Min. 16 annual contributions). Can be contd. Further every 5 yrs.
• Any individual can open an account singly or jointly.
• More than one account can be opened without any limit.
• Account can be opened for 1,2,3 and 5 years.
• Interest for 5 years deposit is 8.4%
• Premature withdrawal after 1 year attracts 2% penalty on interest applicable.
• Amount withdrawn before 5 years period, tax will have to be paid on the withdrawn amount treating it as the income of that year.
• Tax Exemption: Only 5 years term deposit with a Max. Investment of Rs. 1.5 Iakh eligible u/s 80C.
PUBLIC PROVIDENT FUND (PPF)
• Option to continue after maturity for every 5 years.
• Investment: Mm. 500; Max : 1.5 lac p.a.
• Int. @ 8.7% compounded annually.
• Can withdraw 50% of the balance from 7th year onwards.
• An amount equal to withdrawal can be invested from current year’s income to make the account a self sustaining one.
• Loan upto 25% of balance available (2 years ago) is allowed upto the end of 5th year.
• Second loan is given after clearing the first loan.
• No loan is given after 6 years from the date of first subscription.
• After 15 years entire balance can be withdrawn.
• Interest earned is totally exempt u/s 10(11).
• Tax Exemption : lnvest uptoRs.1,50,000 qualifies for deduction u/s 80C.
• A term Deposit to be opened with a scheduled Bank in the prescribed form.
• Mi Investment Rs. 100/-Max. 1 Lakh.
• The Term will be 5 Years.
• Premature encashment not permitted.
• Income-tax benefit amount of term deposit invested along with PPF/LIC/ NSC/ULIP, etc upto a max. of Rs.1.5 Lakh eligible for deduction u/s 80C.
• interest earned on the deposit is taxable.