Tax-saving FDs: Last minute foolproof tax saving ideas; know details

Tax-saving FDs: The tax deadline is just a week away and most of us are looking for tax-saving investments at this peak time. There are myriads of options but Fixed deposits is one of the best options for taxpayers to save their hard-earned money. Investing in fixed deposits not only saves taxes but also provides you money security on your investment. A person can claim an income tax deduction by investing in 5-year fixed deposits scheme under the section 80C of the income tax act 1961.

Tax-saving fixed deposits (FD) account details:

Tax-saving FDs are one of the types of fixed deposits that gives a tax saving benefit or tax deduction onder section 80 C of the income tax Act. These investments can be made using one of the two types of accounts: Single-holder account and join-holder account. Investor can avail deduction of up to Rs1.5lakh per year by investing in a tax-saving fixed deposit account.

Special features:

A 5-year lock-in period
Earned interest is taxed
interest rate ranges from 5.5% to 7.75%


FD schemes offer a higher rate of interest compared to Saving accounts.
It is one-time lumpsum deposit
TDS is levied on the interest on fixed deposits
the minimum period needed to get tax benefits is 5 years. It can be however, extended for longer period of time.
Investors have option to select flexible schemes according to thier convenience.
Investors can claim income tax deduction of upto Rs1.5L per year under section 80C of the income tax Act.
Facility of withdrawal before its maturity

Required documents details:

PAN, Aadhar, Driving License, and other forms of identification are acceptable. Address proof may be a telephone/electricity bill, ration card, bank statement with a check, and so on.

FDs v/s other tax-saving investments:

Besides FDs, there are many tax-saving investment schemes that can help saving tax and develop property as ELSS tax-saving mutual fund, PPF, NSC, etc. fixed deposits are considered as one of the most safest saving options, providing capital security and growth while avoiding market’s risks.

The post Tax-saving FDs: Last minute foolproof tax saving ideas; know details appeared first on News24 English.

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