Income Tax Saving 5 year Fixed Deposit. - Consider these 5 Major Points

Income Tax Saving Fixed Deposit..!

(1) Individuals and HUFs are eligible to open a income tax saving fixed deposit account and claim tax deduction up to Rs. 1.5 lakh in a financial year (2015-16 and 2016-17) for the amount invested.

(2)  Such deposits are only available for five (5) year tenures and can be opened with any bank, except cooperative & rural banks.

(3) The interest earned is taxable at the marginal rate applicable to the tax holder, while the maturity proceeds are tax-exempt.


(4) Tax-saving deposits are locked for the 5-year period and not available for premature encashment or / pledging for a loan.

(5) The deposits can also be opened jointly. In such cases, the tax benefit is available only to the first account holder.

Courtesy : Centre for Investment Education and Learning (CIEL).

Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
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