Income tax benefits of Fixed Deposit Schemes
Under Income Tax Act (as applicable to the financial year 2018–19 [assessment year 2019–20]), the interest received/accruing from fixed deposits/savings bank deposits under the new Section 80TTB up to Rs 50,000 is exempt from income tax, but is applicable to senior citizens only.
Banks also offer tax shield/tax saver fixed deposits that have a lock-in period of five years and are eligible for income-tax deduction under Section 80C (with upper limit up to Rs 150,000).
Avoid tax deducted at source (TDS) on interest income
A fixed depositor whose age is less than 60 years as on the date of making the deposit and whose gross total income is less than the income-tax slab (as applicable to him or her) can submit this form either at the time of making the bank deposit or at the time of effecting renewal of the same, or at any time during the currency of the deposit, but before the date of maturity of the deposit so that the bank does not deduct TDS on the same pertaining to the particular financial year (or assessment year). The depositor is well advised to insist on an acknowledgement from the bank so that one can be sure that TDS is not deducted inadvertently.
This form is to be submitted as above but needs to be submitted by those fixed depositors whose age is more than 60 years (senior citizens).
The lump-sum lessons
- Go for bank deposits that offer maximum interest within a specified minimum period.
- Avail partial withdrawal facility (wherever offered) to meet personal obligations.
- Do not be led into a trap by buying other financial products due to forceful mis-selling.
- Submit Form 15G/15H as soon as you open the fixed deposit (or during the currency of the FD but before date of maturity of the deposit) and secure acknowledgement.
- As and when TDS is deducted, verify in Form 26 whether TDS is reflected therein.
- Axis Bank
- Bandhan Bank
- Canara Bank
- ICICI Bank
- Karur Vysya
- Kotak Mahindra
- Syndicate Bank
- Union Bank
- Yes Bank
- Minimum Deposit (Rs)
- Minimum Period (days)
- Maximum Rol within Min. Period (months)
- Minimum Rol (%)p.a.
- Maximum Rol (%)p.a.
- Premature Withdrawl Penalty (max. %)
- Option for Part Withdrawl of Deposit
- Loan facility (%)
- Auto Renewal
- Additional Max. rol for Senior Citizens
- Customer Feedback