Bank of India Tax Saving Fixed Deposit
Updated 04 Sep 2023
Tax planning is important for personal finance, and Fixed Deposits (FDs) offer a dual advantage of secured returns and tax benefits. Bank of India, a prominent service provider in the Indian banking industry, offers tax-saving FDs to aid individuals in efficient tax management.
These FDs allow depositors to claim deductions under Section 80C of the Income Tax Act and promise attractive interest earnings. In this article, we'll delve into the features, benefits, and nuances of the tax-saving FDs offered by the Bank of India, helping you make an informed decision for your financial well-being and future savings.
Tax Saving FD options offered by the Bank of India
Bank of India offers a tax-saving FD under the scheme called “Star Sunidhi Tax Saving Deposit Scheme.” The features are as follows:
- Eligibility: Only individuals and HUFs having PAN are eligible to deposit in this scheme.
- Benefits Available: The depositor is entitled to claim tax benefits of up to ₹1.5 lakhs in a given financial year under section 80C of the Income Tax Act of 1961.
- Investment Amount: The minimum amount of deposit in this scheme is ₹10,000, and the maximum amount acceptable under this scheme is ₹1.5 lakhs per annum.
- Lock-in: The minimum duration of the deposit is 5 years, and the maximum is 10 years. Premature withdrawal is not permissible.
- Premature Withdrawal: In case of the death of the depositor, premature withdrawal is permissible even during the lock-in period.
- Borrowing against FD: The depositor cannot avail loan against the amount of the deposit.
- Joint Holding: In the case of a joint account, only the first holder is entitled to a tax benefit.
What will happen if an incorrect PAN is furnished by the depositor?
If an incorrect PAN is furnished by the depositor, it may lead to tax implications. In this case, the bank would deduct TDS (Tax Deducted at Source) at the rate of 20%.
Is TDS applicable on interest earned from FDs?
TDS will be deducted from the interest earned on the FDs if the interest is more than ₹40,000 (₹50,000 for senior citizens) in a given financial year.
Can I withdraw my FD before the lock-in period ends?
No, premature withdrawals are not allowed during the lock-in period.
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