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Tax Saver Fixed Deposit
You can save tax and earn interest with Tax Saver Fixed Deposits. It not only helps you build a corpus by way of attractive interest rates, but also tax benefits. Fixed Deposits can help you plan for future expenses or set aside funds for any kind of emergency. You can start with as little as ₹100 and invest up to ₹1,50,000 in Axis Bank's Tax Saver Fixed Deposits. The Tax-Saver Fixed Deposit offers flexible interest pay-out options designed to fit your financial needs. You can select from a reinvestment plan or opt for regular interest payouts — monthly or quarterly — to align with your cash flow needs and tax-saving goals.
Features and Benefits
Get tax benefits on interest earned on 5-year deposits
The provision of Section 80C of IT Act, 1961 whereby a deduction of up to Rs. 150,000 is allowed while computing total income of an individual or HUF in respect of the life insurance premium, contribution to Provident Fund etc. has been amended to include Fixed Deposits with a scheduled bank, for a period of not less than five years. Accordingly, an individual or HUF shall now be entitled to deduction of up to Rs. 1,50,000 on fixed deposits for the period of five years or more. This exemption shall be part of the Rs. 1,50,000 exemption presently available in respect to life insurance premium, contribution to PF etc.
Choose the scheme you want
Choose between a quarterly compounding / reinvestment of interest scheme, quarterly payout of interest scheme and monthly payout interest scheme to the designated account of the depositor.
Invest between limits
Minimum investment is Rs. 100 or multiples thereof Maximum deposit amount is Rs. 1,50,000
Decide between single or joint holder type deposits
- Single holder type deposit receipt can be issued to an individual for himself, or in the capacity of the Karta of the Hindu undivided family.
Claim benefits with a fixed deposit receipt
Tax benefits under this scheme are to be claimed through the Fixed Deposit receipt issued by the Bank.
Forfeit tax benefits on premature closing
Minimum lock-in period of 5 years is stipulated to enable the deposit to be assessed as exempt from taxable income u/s 80C of the Income Tax Act. No term deposit will be encashed before the expiry of 5 years from the date of receipt.
Stay compliant with prevalent tax laws
Fixed Deposits with the bank shall be subject to Tax Deduction at source as per Income Tax Act 1961:
- Interest on these term deposits shall be liable to tax under the Act, on the basis of annual accrual or receipt, depending upon the method of accounting followed by the assessee.
Decide between single or joint holder type deposits
Stay compliant with prevalent tax laws
Fixed Deposits with the bank shall be subject to Tax Deduction at source as per Income Tax Act 1961:
Eligibility
Documents
For latest list of documentation as per the KYC requirements, please visit nearest Axis Bank Branch for more details.
Tax Deductible on Fixed Deposits
WTax-Saver Fixed Deposits yield higher interest rates than Savings Accounts and have a fixed tenure of five years. Investors can claim deductions up to ₹1,50,000 annually under Section 80C of the Income Tax Act, 1961, with a tax-saving FD. This effectively reduces an individual’s gross total income.
For FY24, interest earnings over ₹40,000 attract tax liabilities, adjusted from ₹10,000 in the previous year. Such interest falls under the 'income from other sources' category for tax considerations. This is Tax Deducted at Source (TDS). Tax-saving FDs serve as a prudent method for enhancing savings while offering tax benefits, aligning with financial growth objectives.
How to Avoid TDS on FDs?
You cannot completely avoid TDS on tax-saving fixed deposits, but there are a few ways to minimise the tax outgo under various provisions of the Income Tax Act. These include:
- Tax-saving with Form 15G
Eligibility to submit Form 15G for tax-saving Fixed Deposits is when the annual income is below ₹2,50,000. This form is a declaration that one's income sits beneath the taxable threshold, cancelling TDS on the interest generated from such FDs.
- Tax-saving with Form 15H
Form 15H serves as a tool for senior citizens — 60 years or more, whose annual income does not cross ₹2,50,000 — to claim an exemption on the interest from Fixed Deposits. This form is a testament to their tax-exempt status, preventing TDS on their FD interest earnings.
- Tax-saving with a joint applicant
In joint Fixed Deposit accounts, TDS can be sidestepped if the joint holder is specified as the primary account holder and submits a valid Form 15G or 15H, as applicable. The interest income is then not subjected to TDS for the secondary holder, thus optimising tax benefits.
- Tax deductions for re-investment FDs
- Tax Deducted at Source (TDS)
comes into effect when the aggregate interest earned across all branches on Recurring Deposits (RD) and Fixed Deposits (FD) for an individual exceeds ₹40,000 within a financial year – the threshold is higher at ₹50,000 for senior citizens.
- A TDS Certificate
outlining the details of the tax deducted will be dispatched to the depositor each quarter, offering transparency on the TDS applied throughout the fiscal year.
- Tax Deducted at Source (TDS)
- Documents required for tax-saving FD
Opening a tax-saving Fixed Deposit requires furnishing valid identification and address verification. Accepted documents include Aadhaar, PAN, Voter ID, Driving Licence, Passport or any OVD document for identity verification.
Things to know about Tax-Saving Fixed Deposits
- Guaranteed returns: Tax saver FDs offer fixed and predictable returns, unaffected by market fluctuations.
- Risk-free: Tax-free FD are insulated from market risks, ensuring capital safety.
- Senior citizen advantage: A preferential interest rate that exceeds the standard rate by 0.25% to 0.5% is available for senior citizens.
- Tax deduction: Investments qualify for a deduction under section 80(C) of the Income Tax Act, up to ₹1,50,000 annually.
- Minimum investment: Initiating a tax-free Fixed Deposit is possible with an investment as small as ₹100.
- Maximum investment: The upper limit for investment in tax-saving FDs is ₹1,50,000.
- Eligibility: Only Indian citizens and Hindu Undivided Families (HUFs) can open tax-saving FDs.
Comparison with other Tax-Saving Investments
In comparison to other tax-saving instruments, the rate of interest is mediocre. However, the upside is that the tax-saver fixed deposit rates and returns are guaranteed and risk-free. This is because the returns do not depend on the performance of the capital or stock market. Here are some other tax-saving investments with their rate of interest:
| Instrument | Type of investment | Interest rate | Lock-in period |
|---|---|---|---|
| Equity Linked savings scheme | Market-linked | 10%-12% | 3 years |
| Sukanya Samriddhi Yojana | Government scheme | 7.6% | 21 years |
| Sukanya Samriddhi Yojana | Government scheme | 7.6% | 21 years |
| National Savings certificate | Government scheme | 6%-8% | 5 years |
| National pension scheme | Government market-linked scheme | 8%-10% | Till retirement |
| Unit-linked insurance plan | Market-linked | 7%-25% | 5 years |
To know your tax-saver FD rates, you can use a fixed deposit interest rate calculator.
How to Apply
Applying for Axis Bank’s Tax Saver Fixed Deposit online is a simple process. You can either apply from the comfort of your home or while sitting at your office desk. Here is a simple five step process on how to apply for Tax Saving Fixed Deposits through internet banking. You can also visit our branch to open your Fixed Deposit where our representatives will be happy to help you.
Internet Banking
Step 1
Login to Internet Banking and select the deposit option. To login, click here
Step 2
Click on Create Tax Saver Fixed Deposit
Step 3
Fill in the required account and nominee details
Step 4
On confirmation, the selected amount will be debited from your savings account and your Fixed Deposit will be created instantly. You would get a web receipt of the Tax Saver Fixed Deposit booked instantly. The value date for opening of the deposit and the rate applicable will be as per the date of request i.e. the day on which the savings account is debited.
Step 5
Post creation, the Tax Saver Fixed Deposit Advice will be mailed to your registered e-mail id if you are registered for e-statement and if not registered for e-statements, Physical advice will be dispatched to your communication address. You will be able to also view the Tax Saver Fixed Deposit advice in Internet Banking after one working day of deposit booking.
Branch
You can visit your nearest Axis Bank branch to open Tax Saver Fixed Deposit.
Important Links
Axis Bank’s calculate
Fixed deposit calculator will help you calculate how much rate of interest you can earn by investing in a Fixed Deposit for a fixed tenure. Simply provide the following information, and you can easily calculate FD interests. Lorem, ipsum dolor sit amet consectetur adipisicing elit. Saepe, voluptatum?
₹
5K
1.99Cr
- Days
Rate of Interest*7.10%
Date of Fixed Deposit31 Jan 2024
Maturity Date31 July 2025
Maturity Value
3050
Frequently Asked Questions
You can open a Tax-Saver FD with a minimum of ₹100.
Tax-Saver FDs have a five-year tenure, hence premature withdrawals are not permitted.
With a Tax-Saver FD, you are eligible for deduction up to ₹1,50,000 under section 80C of the I-T Act.
Tax-Saver FDs are ideal for those seeking secure, non-market-linked investments and for individuals preferring guaranteed returns.
Tax-Saver FDs carry minimal risk as they are not linked to market fluctuations. The interest rate at which you book the FD is locked into for the entire five-year period.
Tax-Saver FDs have a single term of five years, unlike regular FDs, which offer a range of maturity periods.
Upon maturity of the Tax-saver FD, both the principal and the accumulated interest is credited to the depositor's Savings Account.
To open a Tax Saver FD, log into Axis Bank's net banking, go to the FD/RD section, select Tax Saver FD, and follow the prompts to invest. You can also invest through Axis mobile app or by visiting an Axis Bank branch.
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