Tax Saving Fixed Deposit u/s 80C
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Introduction
In this article I will be writing about the tax savings fixed deposit. It is one of the popular component for the investors because of the guaranteed return amount. As of now the interest rates are not much attractive hence it losses the shine. This article presents the important facts about the tax savings fixed deposit. If you have any doubts, please post it in the comments section. Subscribe to our free newsletter.
Tax Saving Fixed Deposit u/s 80C
Section 80C provides the fixed deposit option for the tax exemption. The following are the key points regarding the tax saving fixed deposit u/s section 80C:
- It has the lock-in period of 5 years. depositing under this scheme, you will not be able to take the money before five years.
- The interest rates for this scheme will be vary for each bank.
- Tax savings fixed deposit is available only through banks. You can not open it with company fixed deposit product.
- Minimum of Rs.100 is deposited.
- Maximum of Rs.100000 is exempted u/s 80c for one financial year.
- If you are depositing in this scheme, there will not be many other benefits which is allowed for the normal fixed deposit
- No Partial/Premature withdrawal allowed.
- Sweep-in not allowed.
- No Over Draft facility allowed.
- If you have the joint account, the deductions u/s 80c will be allowed only for the first account holder.
- The interest income for this fixed deposit is taxable.
Summary
I hope this article will be useful for learning the basic ideas about the tax savings fixed deposit. Nowadays, the interest rates are not good, so it is not advisable in choosing the fixed deposit. If you have any doubts, please post it in the comments section.
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8 Comments on this post
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Babita said:
Dear Sir,
How much amount of interest is taxable on an FD for a period of say 2 or 5 years?
thanks
Babita
February 2nd, 2010 at 9:48 pm -
arun said:
Hello Krishna,
Is the matured amount taxable during withdrawal after five years or only the interest is taxable?
Thanks.
February 4th, 2010 at 7:15 am -
krishnas said:
Hello Arun,
Interest on PF is not taxable. If you withdraw the money before 5 years, both are taxable.
Thanks,
KrishnaFebruary 5th, 2010 at 3:16 am -
Mohan said:
WHAT IS THE MAXIMUM INTEREST THAT CAN BE EARNED IN A
FIXED DEPOSIT ACCOUNT ANNUALLY WITHOUT ATTRACTING ANY
INCOME TAX?February 28th, 2010 at 12:54 am -
amol said:
if i invest in pnb tax saver fixed deposit scheme and if i earn interest more than my exempt limit (1.4 lacs) den wat will happen according to tax…if i give 15 g form will bank deduct money from my interest….and is bank giving monthly interest under this scheme….
June 8th, 2010 at 7:26 am -
pdave said:
Dear Sir,
I have got some lumpsum amount of money in my mother’s account after my father and now I want to have some long term investment(atleast 10 years) in fully safe instruments (like FDs,PPF..I mean no risk although less return) for my mother.
May you please guide me how should I go ahead.My mom is getting my father’s pension as well monthly.My mummy’s age is 50 and mine is 26.I am getting good salary so no need to keep this money currently on hand.
July 21st, 2010 at 1:28 pm -
Sumit Tambekar said:
Hi,
One small query; can amount be changed for next year ?
For example: for first financial year I would like to invest 50,000 & from next year onwards 95,000.
Is it possible in this kind of F.D ?
Thanks,
Sumit Dnyanesh TambekarAugust 5th, 2010 at 2:59 am
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