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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February 2, 2010 at 9:48 pm
Dear Sir,
How much amount of interest is taxable on an FD for a period of say 2 or 5 years?
thanks
Babita
February 4, 2010 at 7:15 am
Hello Krishna,
Is the matured amount taxable during withdrawal after five years or only the interest is taxable?
Thanks.
February 5, 2010 at 3:16 am
Hello Arun,
Interest on PF is not taxable. If you withdraw the money before 5 years, both are taxable.
Thanks,
Krishna
February 28, 2010 at 12:54 am
WHAT IS THE MAXIMUM INTEREST THAT CAN BE EARNED IN A
FIXED DEPOSIT ACCOUNT ANNUALLY WITHOUT ATTRACTING ANY
INCOME TAX?
June 8, 2010 at 7:26 am
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….
July 21, 2010 at 1:28 pm
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.
August 5, 2010 at 2:59 am
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 Tambekar
January 20, 2011 at 8:03 am
I am senior citizen want to invest in nationalised bank only 5 lac please mail me soon.Thx reds
March 18, 2011 at 11:27 pm
I have deposited 5 years FD with Co-operative credit society, Can I get benefit of u/s 80C for exemption of income tax.
September 21, 2011 at 6:40 am
I buy a tax saver fd in feb 2011 . due to some emergency now i want to break that fd, Please tell me about that, how it can be possible.
November 10, 2011 at 2:20 am
Dear sir
There is a rule for FD tax benefit that it is to take into considertion after 5 years.
But if any person having FD in his/her name died before 5 yrs then what is the rule for the nominee
please revert back as soon as possible.
Regards
Madhur
November 10, 2011 at 2:20 am
Dear sir
There is a rule for FD tax benefit that it is to take into considertion after 5 years.
But if any person having FD in his/her name died before 5 yrs then what is the rule for the nominee
please revert back as soon as possible.
Regards
Madhur
December 13, 2011 at 2:11 am
Hi Krishna,
Can we take Tax saving fixed deposit under 80c in our dependent name like spouse or kid to avail the 80c facility? or FD should be present in our name to avail 80c?
Thanks,
Mano
December 21, 2011 at 10:17 pm
Hi,
Lets say, I deposit 10,000 in ICICI Fixed deposit and shown the receipt towards tax exemption, offering 9% p.a.
1) What is the taxability of the interest earned about 900 each year
Is it taxable ? or not ?
2) I requested ICICI Bank for the pre-mature withdrawal of the principal amount, after completion of 2 years.
a) How an ICICI Executive know that I have shown the FD receipt towards Tax exemption 2 years before.?
b) At any cost, If I want to withdraw, what are the charges and taxes applicable at this point of time?
January 5, 2012 at 1:57 am
Hi KK,
I think following ans’s will be helpful
1) What is the taxability of the interest earned about 900 each year
Is it taxable ? or not ?
—————
It is taxable as per the category you fall that is 10%,20% or 30% according to your income
—————
2) I requested ICICI Bank for the pre-mature withdrawal of the principal amount, after completion of 2 years.
a) How an ICICI Executive know that I have shown the FD receipt towards Tax exemption 2 years before.?
—————
ICICI executive is not bothered whether you are availing tax exemption or not but IT executives will definitely keep track of it whether you have really done the investment and when you withdraw the amount, etc
—————
b) At any cost, If I want to withdraw, what are the charges and taxes applicable at this point of time?
—————
If you withdraw amt before maturity period, both Principle and interest are taxable as per the category you fall that is 10%,20% or 30%
—————
January 12, 2012 at 12:53 am
what do banks do with the money generated through tax saving fd
January 19, 2012 at 4:39 am
I have a taxsaver Fd for Rs. 100,000/- made inthe year 2008. I havent claimed for the same till date and neither do i intend to.
Please let me know know the procedure to break this Fixed Deposit.
January 19, 2012 at 8:26 pm
Hi Suneedh,
Tax saving Bank FD’s have a locking period of 5 years. Since you have invested in year 2008, you have to wait till 2013 to redeem them.
For more information on Tax saving Bank Fixed deposits, Read
http://www.indiastudychannel.com/resources/147599-Save-tax-with-Bank-Fixed-Deposts.aspx?ref=kktheindian
January 24, 2012 at 5:51 am
For 2011, i had submitted a 5 Year Tax saving FD…. but out of the whole amount only 10% was considered….is this correct??
February 8, 2012 at 1:47 am
Hi,
I want to know whether interest earned from the principal amount is taxable or not. I have read somewhere TDS is deducted by bank only if yearly interest earned in more than 10K.
i want to invest 50k so my interset will be around 5k so whether it will be taxable or not.
February 9, 2012 at 2:20 am
i)whether principal amount deposited under Bank’s 5yrs tax saving fixed deposit scheme on maturity is taxable? I am already showing yearly interest earned in my annual income tax return.
ii)Whether Principal amount of matured NSc is taxable if not reinvested?
February 9, 2012 at 4:07 am
Vinod,
1) principal amount is not taxable.
2) principle amount is not taxabale in NSC whether you invest or not. Only last year interest is taxable in NSC as it doesn’t get re-invested.
February 16, 2012 at 8:28 am
Sir,
In case of tax saving fixed deposits,there is a rule that the beneficiary can get the money on completion of 5years period. But if the beneficiary dies before 5 year term, how the money is disposed of?
February 23, 2012 at 10:07 pm
May be this can help you in a better way… If you are looking for some tax saving schemes or plans You should visit http://bit.ly/yU0S2Q or Call India’s 1st financial helpline at 60011600..
March 16, 2012 at 1:46 am
Today, my mom informed me that she doesn’t wash my clothes anymore. Instead, she sprays them with Febreze to “save money”. JK
May 10, 2012 at 5:07 am
Sir,
I make 3 to 4 lacks fd in last 2011-12 for five years can i take rebate under 80 C
Pl give guide line