Definition of Tax Saver Fixed Deposit (FD)
Bank tax saver fixed deposit is a special category of bank fixed deposits wherein an investor can claim a tax rebate under section 80C of the Indian Income Tax Act, 1961, if he/she invests in it. Such deposits are offered for a lock-in period of 5 years and allows the investor to claim a tax deduction of maximum of Rs.1,50,000 by investing in it.
Tax Saving Bank Fixed Deposit Rates U/S 80C
In order to get income tax rebate and save tax on total income, you can invest in the instruments who are eligible for getting income tax rebate under section 80C of Income Tax Act. In this way, you can get tax rebate maximum upto Rs 1.5 lakh. Such instruments include PPF, PF, Life Insurance Premium, Tuition Fees, Repayment of principal of home loan, etc. Tax Saving Fixed Deposits is also one of the most popular ways to save taxes u/s 80C of Income Tax Act.
This is a special type of fixed deposits under which the investor gets the benefit of a tax relief if he/she invests an amount in it. Maximum tax benefit is limited to an investment of Rs 1.5 lakh. Moreoevr, there is a lock-in period of 5 years in such a deposit.
Who Can Invest in Tax Saver FDs?
Following assesses are eligible to open Tax Saving Fixed Deposit account:
- Individuals (either singly or jointly with other individuals)
- Minors represented by guardians
- HUF (Hindu Undivided Family)
- In case of joint FD accounts, only first account holder is allowed to claim deduction under Section 80C of the Income Tax Act.
- Nomination facility is available under Tax Saving Fixed Deposit account.
- No nomination can be made for an FD applied on behalf of a minor.
Bank Tax Saving Fixed Deposit Scheme
Disclaimer: The Saving Fixed Deposit Interest Rates keep on changing. You are advised to check the interest rates with banks before making your FD. Source: Bank Websites