Tax saver fixed deposit comes with a lock-in period of 5 years. This means that partial or premature withdrawal from tax saving FDs is not permitted before the end of the lock-in period of five years. By availing a tax-saving FD, customer can avail tax benefits under section 80C of the Income Tax Act, 1961.
Other things to know about the income-tax saving FDs
The interest earned on an income tax saving Fixed deposit is taxable as per the investor’s tax bracket. The interest on tax saving deposits is payable on monthly/quarterly basis. This can be reinvested, if the investor wants so. In the case of joint deposits, the tax benefit under Section 80C will be available only to the first holder of the deposit.
The following article is an initiative of Livemint and is intended to create awareness among readers.
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| Tax Savings Fixed deposit |
Other things to know about the income-tax saving FDs
The interest earned on an income tax saving Fixed deposit is taxable as per the investor’s tax bracket. The interest on tax saving deposits is payable on monthly/quarterly basis. This can be reinvested, if the investor wants so. In the case of joint deposits, the tax benefit under Section 80C will be available only to the first holder of the deposit.
The following article is an initiative of Livemint and is intended to create awareness among readers.
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