FD interest rates: Investment in the five-year income tax-saving FD is eligible for the 80C tax benefitsSection 80C of the Income Tax Act offers deduction of up to Rs 1.5 lakh from taxable income in a year.
A variety of investments, such as premium paid towards life insurance and contribution to a Public Provident Fund (PPF) Account, are eligible for the income tax benefit offered under Section 80C.
A special type of term deposit orfixed deposit (FD)is also eligible for deduction in taxable income under Section 80C.
A five-year time-deposit small savings scheme account in the post office is also eligible for Section 80C benefits.
( You need to furnish these additional details in new income tax return forms)Income tax-saving FD: Interest ratesMajor banks today - from state-run State Bank of India (SBI) to private sector peers HDFC Bank and ICICI Bank- pay the following interest rates on the five-year, tax-saving fixed deposits, according to their websites.BankInterest rateGeneral publicSenior citizenState Bank of India6.85%7.35%Punjab National Bank6.25%6.75%India Post (five-year TD small savings scheme)7.80%7.80%HDFC Bank7.25%7.75%ICICI Bank7.25%7.75%(Source: Bank, India Post websites)Income tax-saving FD: Premature withdrawalAlso known as a tax-saving fixed deposit or tax-saving FD, this account allows a minimum maturity period of five years and a maximum of 10 years.
That means the deposit is locked-in for a period of five years.Lenders do not allow a premature withdrawal from this type of FD accounts before completion of the lock-in period of five years.Income tax-saving FD: Lock-in periodInvestment in these fixed deposits - tax-saving FDs - is locked in for a period of five years from the date of issue, which means the investor cannot withdraw money during this period in order to utilize the tax benefit.Income tax-saving FD: Investment limitA maximum investment of Rs 1.5 lakh in a financial year is allowed in income tax-saver five-year fixed deposit.SBI allows a minimum deposit of Rs 1,000 for investment in its tax-saving scheme, according to the bank's corporate sites - sbi.co.in.
Any amount in the multiple of Rs 1,000 not exceeding Rs 1.5 lakh a year is allowed by the bank.Get the latest election news, live updates and election schedule for Lok Sabha Elections 2019 on TheIndianSubcontinent.com/elections.
Like us on Facebook or follow us on Twitter and Instagram for updates from each of the 543 parliamentary seats for the 2019 Indian general elections.