Tax Saving FD: For those looking for an option to save tax before the financial year 2023 ends, a fixed deposit (FD) may be a good choice. Many banks and post offices offer tax saving FDs with a maturity period of five years. This option can help you save maximum tax, especially if you have already explored other options such as post office schemes, National Pension System (NPS), home loans, and mutual funds.
Banks such as SBI, HDFC Bank, ICICI Bank, DCB Bank, and AU Small Finance Bank offer interest rates ranging from 6.50 per cent to 7.60 per cent on tax saving FDs. By investing in a tax saving FD, you can save tax under section 80C of the Income Tax Act, 1961. However, only those who have opted for the old tax regime can get tax exemption through it. Under the new tax regime, the option of tax saving through FDs is not available.
It is important to keep in mind that only individuals and Hindu Undivided Families (HUFs) can invest in tax saving FDs. Minors can invest with the help of their parents. The maximum amount that can be invested in a tax saving FD is up to Rs. 1.5 lakhs.
One should also be aware that tax saving FDs have a maturity period of five years, and premature withdrawal or loan permits are not allowed. Therefore, it is important to consider your financial goals and liquidity requirements before investing in a tax saving FD.
If you are looking for an option to save tax before the financial year 2023 ends, a tax saving FD may be a good choice. Many banks offer this option with attractive interest rates, and it can help you save tax under section 80C of the Income Tax Act, 1961. However, it is important to consider the maturity period and liquidity requirements before investing.
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