All About Tax Saving Fixed Deposits

Tax Saving Fixed Deposits

Tax Saving fixed deposits are suitable for investors looking for lower risk and a fixed and guaranteed return on a long- term basis. Deposit made is allowed as a deduction under Section 80C up to Rs 1.5 lakh. If you invest say Rs 50000, and your total income is taxed in the 20% tax slab rate, a deduction of Rs 10000 (Rs 50000 * 20%) will be allowed.

1. Lock-in period is 5 years
2. Minimum Investment required is Rs 100
3. No Limit on the maximum investment
4. Interest rate: Differs from bank to bank. Currently around 6.50% – 7.25%.
5. Deduction on Principal is allowed
6. Interest taxable at normal tax rates