Fixed Deposit Under 80C

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Updated: 27-08-2019 10:35:14 AM

Whenever you are looking for an investment without market risk, Fixed Deposits (FDs) are the best options available. This saving instrument for a many decades has been a preferred choice for many investors nationwide. There are different types of fixed deposits available and each of them comes with their own benefits. Some of the available types are:

Fixed Deposit Under 80C

These are kinds of fixed deposits which come under the purview of section 80C of the Income Tax Act of India. Popularly, these deposits are well-known among customers that it helps in saving taxes for them. Most of the financial companies and banks in the country offer these type of FDs to its customers. Tax payers can get deductions of up to Rs. 1.5 lakhs in a financial year with these fixed deposits like other tax saving instruments. In India, most of the tax payers invest in tax saving FDs, Public Provident Fund, National Savings Certificate, Sukanya Samridhi Yojana, infrastructure bonds, etc. to avail the deduction and save tax. Therefore, these fixed deposits are a popular option among all of the tax payers.

Under Section 80C of the Income Tax Act, each tax payer, irrespective of the tax slab they are in, are eligible to get a deduction of Rs. 1.5 lakh every financial year. There are many tax saving instruments available in the country and a total deduction of Rs.1.5 lakh can be availed across all of them.

Let’s understand more about Fixed Deposits Under Section 80C

The tax saving deposits have been carefully designed with many features which benefit the investor.

Some of the important features are:

  • Minimum amount of Rs. 100 and maximum amount of Rs. 1.5 lakh can be invested
  • Maturity period is 5 years
  • TDS is deducted on any income earned from these deposits
  • The bank or the financial company announces the rate of interest
  • This account can be opened by both individuals and HUFs (Hindu Undivided Famalies)
  • No premature withdrawals are allowed
  • Tax deductions are only available to the first holder in case of join accounts
  • No loans can be availed against these deposits

 Advantages of Fixed Deposit under Section 80C

For all tax payers, the tax saving deposits are a great and convenient way to invest money. Some of the main benefits of these are:

  • The foremost advantage is that it helps get a deduction of Rs. 1.5 lakh from the tax payable
  • It can be opened anytime of the year
  • Interest is paid on quarterly basis or at the time of maturity
  • For medium term investors, these are one of the best options
  • Senior citizens get special rates

Presently, the Indian financial market has many options for the investors who are also looking to save taxes. Many people invest in under instruments like mutual funds etc. The main advantage of investing in tax saving fixed deposits is that the returns are assured at the time decided and is not affected by the daily market fluctuations.

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