Srinagar: If you think of saving tax by opting tax saver fixed deposit (FD), we’re here providing you with top smart facts about tax saver fixed deposit (FD).
Tax saver FD is a type of fixed deposit by investing in which you can get tax deduction under section 80C of the Indian Income Tax Act, 1961.
Tax saver deposits are available in two different types: Single holder Type Deposits and Joint holder Type Deposits and is offered for a lock-in period of 5 years.
HDFC Bank, SBI Bank, Axis Bank, ICICI Bank and IDBI Bank are the top most banks offering tax saver fixed deposit for five years.
Below is the list of the four smart facts about tax saving fixed deposit, reports Economic Times:
1. Tax Saving Fixed Deposit Account
HUFs and individuals can claim tax deduction up to Rs 1.5 lakhs by opening a tax saving fixed deposit account in a financial year for the amount invested.
2. Deposits Available for 5-year Tenures
With tax saving FD you deposit for 5-year tenures and an account can be opened with any bank, except cooperative and rural banks.
3. Maturity Proceeds Tax-Exempt
The interest earned is taxable at the marginal rate applicable to the tax holder, while the maturity proceeds are tax-exempted.
4. Tax-saving Deposits Locked For 5-Year
Tax-saving deposits are locked for a 5-year period and not available for premature encashment or pledging for a loan.