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Tax Benefits on Senior Citizen Fixed Deposits: A Key Advantage
Posted on Tuesday, April 15th, 2025 | By IndusInd Bank
Summary: Offering attractive interest rates and significant tax advantages, senior citizen fixed deposits are an excellent investment choice for retired individuals to grow their savings. IndusInd Bank’s senior citizen fixed deposit scheme offers flexible tenure options and competitive interest rates, ensuring a secure income after retirement.
Planning for retirement requires carefully balancing stable returns with lower tax obligations. Making the right investment decisions and using tax-efficient strategies can ensure steady fund growth after retirement. Fixed deposits (FDs) are a preferred investment choice among senior citizens due to their predictable returns and minimal risk. In addition to the guaranteed returns, senior citizen fixed deposits carry significant tax benefits, which are often overlooked. By learning of these benefits, retired individuals can optimise their savings and build a more secure future.
In this blog article, we will explore the advantages of senior citizen fixed deposits, focusing particularly on the tax benefits they offer and how these can boost post-retirement income.
| Higher Interest Rates for Senior Citizens | Senior citizen fixed deposits are specifically tailored for individuals aged 60 and above, providing them with interest rates that are higher than those offered on regular fixed deposits, thus ensuring better returns. For example, a bank may offer a 7.99% interest rate on a regular FD, while senior citizens might enjoy a slightly higher rate of 8.49% on their FDs. The higher senior citizen fixed deposit rate guarantees better returns, making it a lucrative choice. |
| Tax Benefits Under Section 80C | Under Section 80C of the Income Tax Act, senior citizens can claim deductions for investments made in Tax Saver FD. The maximum deduction allowed annually is INR 1.5 lakh. For instance, if a senior citizen invests INR 1.5 lakh in a Tax Saver Fixed Deposits, the entire amount is allowed to be deducted from their taxable income. If their annual income is INR 7 lakhs, their taxable income would be reduced to INR 5.5 lakhs, thereby lowering their tax liability. |
| Exemption from Tax Deducted at Source (TDS) | The government deducts TDS at a rate of 10% if the interest income on your FD exceeds INR 40,000 (INR 50,000 for senior citizens) in a financial year. Senior citizens can avoid TDS on interest income from FDs by submitting Form 15H, provided their total annual income is below the taxable threshold. |
Apply for IndusInd Bank’s Senior Citizen Fixed Deposit Scheme
IndusInd Bank provides a special senior citizen fixed deposit scheme, enabling senior citizens to grow their savings while enjoying better returns. This scheme is designed to offer financial security and stability in retirement. Here are some of its compelling features and benefits:
- Minimum deposit requirement of INR 10,000
- Flexible tenure options ranging from 7 days to 120 months
- Interest rates up to 0.50% higher than standard FDs
- TDS on interest in accordance with applicable tax laws
- Options for premature withdrawal for convenient access to funds
Consider applying for the IndusInd Bank senior citizen fixed deposit scheme to take advantage of the benefits discussed. Begin investing today to enjoy increased returns and financial stability throughout your sunset years!
Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your 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 making any financial decisions based on the contents and information.
