If you are planning to save tax by December, start saving money from this month itself. Tax Saving FD schemes offer attractive interest rates now which may continue for another couple of months. I have done a comprehensive list of Tax Saving Fixed deposit interest rates and you can choose the best one among the list. This post is based on request made by Prathap on "Suggest a topic".
Tax Saving FD schemes
If you want to save tax on your salary, you can invest up to Rs 100,000 u/s 80C and get income tax exemption. Out of the all available tax saving schemes, Tax Saving FD schemes are favorite one for many of us.
Also read: How Salary individuals can save income tax u/s 80C and beyond?
High Interest: Out of all tax saving options available to you u/s 80C, Bank FD schemes offer fixed interest.
Principal is protected: If you consider ELSS tax saving scheme, there is risk of capital erosion, however investing in Bank tax saving FD, there is no such risk.
Tenure: Out of available secured tax saving options u/s 80C, tax saving bank FD’s are the only options available which are 5 years period paying high interest. Though PPF also offers high interest, the maturity of the PPF is 15 years. NSC tenure might be comparable, but interest rates are low.
Tax Saving FD interest rates as of 3-Oct-13
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Suresh
Invest in Tax saving fixed deposits (FD) schemes offering high interest
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I am a NRI. I am looking for a steady income of 1lakhs per month. How much and where should I invest?
Hi Peter, In such case you can invest in NRE FD schemes. Majority of Indian banks are offering up to 9% tax free income. If you want Rs 1 L per month. You need Rs 1.35 Crores to invest in NRE FD Scheme to get Rs 1 Lakh steady income
dear sir
my monthly income is roughly 3.5 lacs. i already possess a immovable property in my name and i am dwelling in it. i woould like to know as to how do i invest in a safe and smart way. my income mostly consists of business income and tax is deducted at source.i have already invested one lakh limit in PPF for the year.i have also taken insurance policies in my name and in my spouse name. i also have a car insurance policy. i have two kids. first one is studying in upper primary . i want to know about child education plans and retirement plans in place for me.
Hi Hari, There are several ways you can plan for the points indicated by you. You have already exhausted Rs 1 Lakh in PPF. If you want safe tax free income, you should invest in Tax Free bonds like NHB (Subisidiary of RBI) which was offered 6 months back. You can refer this article for tax free investments. https://myinvestmentideas.com/2013/05/best-tax-free-investments-in-india/ I hope you would have taken adequate term insurance policies, if not, please plan this as first priority. Coming to child education plans and retirement plans, generally I do not believe in them. Why there should be seperate plan for them ? You can invest in several options like large cap mutual funds, balanced mutual funds, secured NCD’s, top rated company fixed deposits to get higher returns. Check various articles on our blog. Try to match with your risk appetite and start investing. Don’t overboard high risk options, but invest slowly from zero or low risk option to medium risk option and then try for a few high risk options too. This way you can balance and gain more.
Hi Suresh,
Need some clarifications on Tax Savings FD and Taxation. I apologize for a long list of queries, but i have these doubts for past few months, and due to some unavoidable circumstances, unable to get the clarifications with you in the past.
1. Is Investing on Fixed Deposit for 5 Years on any bank (even if the bank have no specific Tax Saver FD Schemes) eligible for Tax benefit under 80C?
2. If my PAN card is not mapped with my Savings Account / FD, if the Total Interest on the year is lesser than 10000, will TDS be recovered with 20% or only be recovered if the Total Interest goes beyond 10000?
3. If i Invest Tax Saver FD for 5 Years in my name, is it possible for my mother to get tax benefit for investing in my name (As Insurance Products offer tax deduction of investments under spouse and children)
4. I invested in 5 Years fixed deposit on Tamilnadu Power Finance Corporation. They have not mentioned that the Investment is under 80C. But, since it is a 5 years FD (Cumulative) will it be eligible for 80C?
5. In case if Power Finance has deducted tax at source (i recently submitted the 15G form for investment on april), will the tax credit be shown on Traces Form 12A or do i have to approach the Power Finance for Tax Credit Certificate?
6. Assume that my wife invested 4 lac on 1 year FD, and submitted the Form 15G. She is investing a short term deposit for some 50 days (2 Lac) without form 15 G, will the tax be deducted at source, for the 50 Days FD?
Regards,
Vignesh. S
No problem Vignesh 1) Any FD more than 5 years need not be tax saving FD. Tax saving FD has a lock-in period 2) TDS would be deducted 20% in excess of Rs 10,000 in SB account. 3) No, your mother cannot get benefit from your investment 4) Companies cannot issue tax saving FD schemes. It should be only banks and and Post office 5) Yes it would shw in TRACES 6) If you have given form 15G they would not deduct, else they would deduct at 20% without PAN and 10% if PAN details are given.
Hi,
I have done a simple FD of 20 k rs and have done post office rd of 30 k .
So can i show this for tax saving purpose.
and yes your data content is awesme and helping thousand of people for knowledge growth.
Reply fast if possible.
Regards
Praveen
Praveen, I think you are asking whether they are eligble u/s 80C or not. If you do bank FD of 5 years, it would be eligble. Also if you do Post office TD (not RD), you are eligble for exemption u/s 80C
Hi Suresh
I had personal meeting with manager of Dena bank and SBI and they said that for sure recurring deposit is not taxable. I am investing with RD and they have assured me that I won't be paying any taxes. He also mentioned some NRI non taxable schemes as well.
Hiren, Some banks are not deducting RD interest. But I felt it is out duty to declare in IT returns and pay tax.