How Can You Save Rs 46,800 with a Tax Saver FD?

Posted on Friday, November 4th, 2022 | By IndusInd Bank

Like any other Indian middle-class individual, Mehul also grew up learning the importance of savings and investment. So when he hit the one-year mark at his first job, he decided it was finally time to start investing in a fixed deposit account with IndusInd Bank to meet his long-term financial needs. He would be earning attractive FD interest rates and stable returns over time, and he might even be able to afford his dream ride with these funds!

However, what he doesn’t know is that he has the option of investing in a tax-saving FD and saving up to Rs. 46,800 on his investment. How? Here’s all you need to know about FD tax-saving investments and their features.

What is a Tax-Saving FD?

For most taxpayers seeking profitable investment avenues, income tax saving is a top priority. A fixed deposit account with tax saving options allows tax deductions under section 80C of the Income Tax Act 1961. An individual investor or a HUF can claim tax savings of up to 1.5 lakhs per annum on their tax-saving fixed deposit account.

Moreover, you will have to invest your funds for a minimum of 5 years to enjoy the tax benefits and earn attractive returns. With IndusInd Bank, you can invest your funds at a higher tax-saving FD interest rate of upto 7.0%* for individuals and 7.75%* for senior citizens.

Features of IndusInd Bank Tax Saving Fixed Deposit

Investing in a tax saver FD by IndusInd Bank allows you to build significant returns and save on income tax over the FD tenure. Here are some of the key features of IndusInd Bank FD with tax saving options-

1. Lock-in Period

You have to invest in a tax-saving FD for a lock-in period of 5 years. While a premature withdrawal facility is not allowed on this FD account, you can enjoy regular interest payout for maximum returns.

2. Taxable Interest

When you invest in a tax saving scheme fixed deposit, the interest you earn is taxable and deducted at source.

3. Convenient Interest Pay-Out Options

Much like a regular FD investment, you can also choose when you will receive the interest under a tax-saving fixed deposit. Depending on your needs and financial goals, IndusInd Bank offers flexible interest payment options of monthly, quarterly, half-yearly, yearly or at-maturity payouts.

What’s more, you can even choose to reinvest the interest income in the principal amount for a determined period.

4. Benefits for Senior Citizens

At IndusInd Bank, senior citizens can invest at higher tax-saving FD interest rates and maximise their earnings. We offer an attractive interest rate of 7.75% on our tax savings scheme to senior citizens, which also allows them to save extra on taxes and generate higher returns.

How Does a Tax Saver FD Scheme Work?

Individuals with a net taxable income between Rs. 10 lakhs and 50 lakhs per annum are eligible for tax deductions of Rs. 46,800 by investing in a tax saving plan with IndusInd Bank. Let’s understand this with an example.

Suppose you are a working individual with an annual income of Rs. 15,00,000. As per the old tax regime, you will fall under the 30% tax slab. Considering you invest Rs. 1,50,000 in a tax-saving FD, the applicable tax rate will be 30%, and the tax amounts to Rs. 45,000.

Now considering the 4% education cess on your tax, the final amount becomes Rs. 45,000 + Rs. 1,800 = Rs. 46,800.

This way, you can claim total tax deductions of Rs. 46,800 in a year, following the old tax regime.

In Conclusion

If tax savings is one of your investment priorities, a fixed deposit is a fruitful investment option as it offers stable and assured returns in the long term. And when you’re looking to open a fixed deposit at attractive interest rates, choose IndusInd Bank. With a hassle-free online process, you can book your FD instantly and enjoy amazing benefits such as flexible interest payout and auto-renewal options.

Check out our website or visit our nearest branch for more.

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.