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3/23/21

The bank, including Yes Bank, RBL Bank and IndusInd Bank, pays more than 7% interest on tax saving FDs to senior citizens.





Tax Saving Tips:The bank, including Yes Bank, RBL Bank and IndusInd Bank, pays more than 7% interest on tax saving FDs to senior citizens.







If you have not yet invested to get tax exemption for 2020-21, you can invest in Tax Saving Fixed Deposit (FD). It provides tax exemption on investments up to Rs 1.5 lakh under Section 80C of the Income Tax Act.

A 5 year FD is called a tax saving FD. You have to invest in it for 5 years i.e. for long term. All banks offer tax saving FDs. Even on tax saving FDs, senior citizens get higher interest than others. Find out which bank is paying interest on FD.





Special matters related to tax saving FD

Only individual and Hindu undivided families get tax exemption on investment in tax saving fixed deposit.


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This deposit should be for at least five years. Loan facility on premature withdrawal and fixed deposit is not available on it.
Investments made in the post office for 5 years are also included in the tax exemption under Section 80C of the Income Tax Act, 1961.


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Post Office Fixed Deposit can be transferred from one Post Office to another.
This type of FD can be done in single or joint holding. If it is in a joint holding then only the first holder will get the benefit of income tax exemption.


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The interest earned on this type of FD is not tax free and TDS is deducted accordingly by adding it to the investor's income.

Interest on this deposit is earned on a monthly / quarterly basis which can be reinvested.
Withdrawals before maturity and taking a loan on this FD are not available.
This deposit has a lock-in period of 5 years.

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What is Section 80C?
Section 80C of the Income Tax Act is in fact part of the Income Tax Act, 1961. It refers to the investment medium in which an income tax exemption can be claimed by investing. Many people start investing to save tax before the end of the financial year.

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