Income Tax: Last chance to save tax up to Rs 1.5 lakh, this method will be useful

Tax Saving Investment: There is very little time left to make tax saving investments in the financial year 2023-24. If you want to save income tax in the financial year 2023-24, then the investment for this will have to be made by 31st March because the new financial year 2024-25 will start from 1st April 2024. You can make fixed deposits through popular schemes of the bank. Will be useful for you in saving tax. But for this you will have to invest in 5 year FD. Tax up to Rs 1.5 lakh can be saved through this scheme. Technical information-

5 year FD is known as tax saving FD.

Generally, tax benefit is not available on FD. This is because whatever interest you earn gets added to your annual income. In such a situation, if your income comes under the ambit of tax, then you will have to pay tax on it as per the slab rate. But 5 year FD is called tax saving FD. In 5 year FD you get the benefit of Section 80C of the Income Tax Act. Under Section 80C, you can claim a deduction of Rs 1.5 lakh from your total income.

Option available in all banks and post offices

5 year tax saving FD option is available in all banks. Apart from this, you will easily get this option in the post office also. However, its interest rate may vary in different banks and post offices. In such a situation where you are getting better interest, you can invest in this FD.

These are the disadvantages of breaking before 5 years

If you break the FD before the maturity of 5 years, then you do not get tax benefit on it. Besides, you will also have to pay a fine. According to the rules, if you break the FD before maturity, then the entire amount of the year in which you break the FD, on which you have availed the benefit of income tax exemption, will be added to your income. Apart from this, interest is also added to your income. After this, you will have to pay tax according to the income tax slab you fall in.

What is 80c?

80C is part of the Income Tax Act 1961. It mentions those investment options in which you can claim tax exemption. By investing in these schemes, you can save tax on Rs 1.5 lakh out of your total taxable income under Section 80C. Most people invest in these before the end of the financial year to save tax.