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Tax Saving FD Scheme: If you are looking for great returns, risk-free investment and income tax saving scheme then fixed deposit is great. Thus, fixed deposit can be done anywhere and in any way. But if you plan and get tax exemption on good returns then there is double benefit. You will get a lot of benefit in tax saving FD scheme with a lock in period of 5 years. Let's know what is this great scheme…
Why is Tax Saving FD Scheme a good option?
As the name suggests, tax savings. So it is clear that there will be income tax exemption. Actually, the return you get during the 5-year lock-in period will be tax free. But interest up to Rs 40,000 in 1 year is tax free. According to the Income Tax Act 1961, tax exemption will be available under section 80C. Investment up to Rs 150000 per financial year will be tax free. There is no risk in this because the government guarantees fixed deposits. Fixed deposits can be made in any government or private bank. So there is also a facility to get FD in the post office.
Where is the FD interest rate?
Bank of Baroda: 6.50%
SBI: 6.50%
PNB: 6.35%-6.50%
Canara Bank: 6.70%
Union Bank: 6.50%
Indian Overseas Bank: 6.50%
Post Office TD: 6.9% to 7.5%
HDFC Bank : 7.00%
ICICI Bank: 7.25%
Axis Bank : 7.00%
Indusind Bank: 7.25%
Kotak Bank: 6.20%
Yes Bank: 7.25%
DCB Bank: 7.40%
RBL Bank: 7.10%
IDFC Bank : 7.00%
Note: Senior citizens get 50 basis points more on tax saving FDs than normal investors. This is applicable in most banks.
5 year tax saving FD scheme lock in period It locks your money for 60 months. It is not allowed to be withdrawn before maturity i.e. 5 years. In case of death of the FD holder, the nominee is allowed to withdraw the money before maturity.
Fixed limit for return, TDS will be deducted on higher tax,
Tax saving FD is tax free but if the interest earned on the invested money is more than 40 thousand in a year then tax will have to be paid. In case of senior citizens, the tax exemption limit is up to 50 thousand. The bank will pay the remaining TDS due on maturity.
Tax Saving FD Benefits
– Tax exemption under section 80C of Income Tax
– Deduction on investment up to Rs. 1.50 lakh
– Fixed interest rate for 5 years, no risk
– Nominee facility
– 0.50% more interest for senior citizens
– There is no facility of breaking FD before maturity and auto renewal
To invest in tax saving FD
– ID proof (Aadhaar card, PAN, driving license, passport)
– Address Proof (Aadhaar Card, Utility Bill, Ration Card, Voter ID Card, Driving License, Passport)
– Signature proof (passport or driving license)
– 2 passport size photographs