Tax Saver FDs
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Tax Saver Fixed Deposit (FD): Tax Benefits
Tax Saver Fixed Deposit, Tax benefits first introduced in Budget 2006, have a tenure of five years with no premature withdrawals. So tax deduction u/s 80C is only allowable, if FD have a tenure of 5 years. The amount invested will be locked up to five years, this is the main condition. In march, at the end of the financial year, ‘tax investments’ in tax-saving schemes to avail more tax benefits on rise. Let’s discuss the features, benefits & important points of Tax Saver fixed deposits (FD).
Tax Saver Fixed Deposit Features
Amount of Investment: The minimum investment start from Rs. 100 and can be made in multiples of Rs.100 subject to maximum of Rs 1,00,000/-
Interest Period: One can avail the option for monthly and quarterly payout of interest on the Fixed Deposit (FD)
Rate of Interest: You can go to this link to check latest rates of Tax Saving fixed deposit rates.You can also compare the fixed deposit rate of various banks before invest.
Interest Taxable: Interest on FD will be taxable in the head of “Income from other sources”, TDS is also will be applicable if interest is above Rs. 10,000 in a financial year. But you can avoid TDS on bank fixed deposit, read the tips to avoid TDS on FD.
Deposit Receipt: Bank will issue a Fixed Deposit Receipt that shall be the basis of claiming tax benefits.
Yes, after reading the above features, you might be thinking that Fixed Deposit is the best tool to save tax. But here are some points to noted before invest in FD especially to save tax.
Points to remember before invest in FD
You cannot pledge the term deposit as collateral to secure a loan to meet your liquidity needs.
Banks do not offer overdraft facility on tax-saver deposits.
Income Tax Benefits on Tax Saver Fixed Deposit (FD)
Amount invested in bank fixed deposits (along with other eligible investment u/s 80C) like PPF, LIC, NSC, etc. up to maximum of Rs. 1,00,000 is eligible deduction u/s 80C.
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Tax Saver Fixed Deposit (FD): Tax Benefits
Tax Saver Fixed Deposit, Tax benefits first introduced in Budget 2006, have a tenure of five years with no premature withdrawals. So tax deduction u/s 80C is only allowable, if FD have a tenure of 5 years. The amount invested will be locked up to five years, this is the main condition. In march, at the end of the financial year, ‘tax investments’ in tax-saving schemes to avail more tax benefits on rise. Let’s discuss the features, benefits & important points of Tax Saver fixed deposits (FD).
Tax Saver Fixed Deposit Features
Amount of Investment: The minimum investment start from Rs. 100 and can be made in multiples of Rs.100 subject to maximum of Rs 1,00,000/-
Interest Period: One can avail the option for monthly and quarterly payout of interest on the Fixed Deposit (FD)
Rate of Interest: You can go to this link to check latest rates of Tax Saving fixed deposit rates.You can also compare the fixed deposit rate of various banks before invest.
Interest Taxable: Interest on FD will be taxable in the head of “Income from other sources”, TDS is also will be applicable if interest is above Rs. 10,000 in a financial year. But you can avoid TDS on bank fixed deposit, read the tips to avoid TDS on FD.
Deposit Receipt: Bank will issue a Fixed Deposit Receipt that shall be the basis of claiming tax benefits.
Yes, after reading the above features, you might be thinking that Fixed Deposit is the best tool to save tax. But here are some points to noted before invest in FD especially to save tax.
Points to remember before invest in FD
You cannot pledge the term deposit as collateral to secure a loan to meet your liquidity needs.
Banks do not offer overdraft facility on tax-saver deposits.
Income Tax Benefits on Tax Saver Fixed Deposit (FD)
Amount invested in bank fixed deposits (along with other eligible investment u/s 80C) like PPF, LIC, NSC, etc. up to maximum of Rs. 1,00,000 is eligible deduction u/s 80C.
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