Tax Save: There is very little time left to make tax saving investments in the financial year 2023-24. If you want to save tax in this financial year, then this very popular scheme of the bank can be helpful for you.
Tax Saving Investments: There is very little time left to make tax saving investments in the financial year 2023-24. If you want to save income tax in the financial year 2023-24, then the investment for this will have to be done by 31st March because the new financial year 2024-25 will start from 1st April 2024. The bank’s popular scheme Fixed Deposit can be useful for you in saving tax. But for this you will have to invest in 5 year FD. This scheme can save tax up to ₹ 1.5 lakh. Know how-
5 year FD is known as tax saving FD.
Generally, tax benefit is not available on FD. The reason for this is that whatever interest you earn is added to your annual income. In such a situation, if your income comes under the ambit of tax, then you have to pay tax on it as per the slab rate. But 5 year FD is known as tax saving FD. In 5 year FD you get the benefit of Section 80C of the Income Tax Act. Under Section 80C, you can claim a deduction of Rs 1.5 lakh from your total income.
Option available in all banks and post offices
The option of 5 year tax saving FD is available in all banks. Besides, you will easily get this option in the post office also. However, its interest rate may vary in different banks and post offices. In such a situation, where you are getting better interest, you can invest in this FD.
These are the disadvantages of breaking before 5 years
If you break a 5 year FD before maturity, then you do not get tax benefit on it. Besides, you also have to pay penalty. According to the rules, if you break the FD before maturity, then in the year in which the FD is broken, the entire amount on which you have availed the benefit of income tax exemption, will be added to your income. Apart from this, interest is also added to your income. After this, you have to pay tax according to the income tax slab you fall in.
What is 80c
80C is part of the Income Tax Act 1961. In this, those investment options have been mentioned in which you can claim tax exemption. By investing in these schemes, you can save tax on Rs 1.5 lakh out of your total taxable income under Section 80C. Most people invest in these before the end of the financial year to save tax.
