Tax planning before March 31 deadline? Tax saving fixed deposits with high interest rates – check list – The Times of India

(*31*)

A Tax Saving FD represents a particular time period deposit that gives tax benefits underneath Part 80C. (AI picture)

It’s that point of the 12 months once more if you scramble for final minute tax saving investments. Those that systematically organized their tax-saving investments all year long stay comfortable, while final-minute planners are speeding to maximise deductions and choose acceptable funding automobiles.
With the monetary 12 months concluding in a fortnight, people should compute tax financial savings, check investments and determine on a correct tax saving technique. Amongst the tax-saving alternate options, a Tax-Saving Fixed Deposit (FD) is a well-liked possibility for conservative buyers. It’s price noting that tax saving funding avenues must be thought of solely if you’re submitting your earnings tax return underneath the outdated tax regime.
Additionally Learn | Gold costs at document high! Have yellow steel costs peaked? Check these 5 charts before placing extra money in gold

What’s a Tax Saving FD?

A Tax Saving FD represents a particular time period deposit that gives tax benefits underneath Part 80C of the Revenue Tax Act, 1961. It permits buyers to assert a deduction as much as Rs 1,50,000 from their taxable earnings inside a fiscal 12 months. These deposits keep a fixed interest charge all through their 5-12 months length, guaranteeing dependable and safe funding returns.
In keeping with an ET report, the 5-12 months obligatory lock-in length prohibits early withdrawals from the fixed deposit. This ensures the funding grows all through the desired interval.

Tax Saving FDs: Interest Rates

*Information as on March 18, 2025 quoted from ET

Tax Saving FDs: How Does Interest Taxation Work?

A tax profit as much as Rs 1,50,000 is obtainable yearly by way of Part 80C deductions underneath the outdated earnings tax regime. This provision permits people to lower their taxable earnings, leading to lowered tax obligations.
The tax benefit is restricted to the preliminary funding quantity, excluding any interest earnings. Interest earnings turns into half of the entire taxable earnings and attracts tax primarily based on the person’s earnings tax bracket.
Additionally Learn | New TDS guidelines from April 1, 2025: Check new tax deduction limits for FD interest, MFs and lottery wins
Banks withhold Tax Deducted at Supply (TDS) when interest earnings surpass Rs 40,000 yearly (Rs 50,000 for senior residents).
Throughout earnings tax return (ITR) submitting, people can request refunds or modify TDS quantities if their whole tax legal responsibility falls beneath the deducted TDS.
Tax Saving FDs differ from customary fixed deposits as they don’t assist mortgage or overdraft amenities. These deposits lack computerized renewal choices, requiring handbook reinvestment put up-maturity if desired.