ICICI Bank Tax Saving Fixed Deposit

Overview FD Interest Rates FD Calculator Open FD Close FD Tax Saving FD Senior Citizen FD Rates

Updated 30 Aug 2023

Saving money on tax payments might be the most gratifying thing. Although taxes become inevitable after a particular income threshold, it is important to understand that you can always reduce your tax liability by taking appropriate measures.

If you’re looking to invest long-term with an objective to reduce your tax liability on your amount, tax-saving FDs are the way to go. Let’s look at how ICICI offers its Tax-saving FDs and the various perks you get along with.

Features of the ICICI Tax-Saving FDs

The Tax-Saving FDs have a minimum lock-in period of 5 years.
ICICI Bank Tax Saving Fixed Deposits are entitled to tax saving up to ₹ 1,50,000 p.a. under section 80C of the I-T Act.
Also, the interest income from ICICI Fixed Deposit is taxable according to the slab income tax rates. Any customer can claim a deduction up to ₹ 40,000 per annum of the interest income earned on the fixed deposit as per section 80TTB of the I-T Act. For senior citizens, the deduction limit is ₹ 50,000 per annum.
According to section 194A of the I-T Act, the bank is liable to deduct TDS at 10% of the interest income their customers earn on fixed deposits. Also, if the investor fails to provide PAN Card details to the bank, the TDS rate will be 20%.
This feature of tax-saving FDs is constant throughout all banks and services. Under no circumstances can you break a tax-saving FD before its maturity period of 5 years.

Eligibility Criteria and Documents Required

Both individuals and Hindu Undivided Families (HUFs) are qualified to invest in these tax-saving FD schemes.
For the purpose of tax savings, one can opt for fixed deposits in either public or private sector banks. However, cooperative and rural banks don't qualify.
A 5-year term deposit in a post office is also recognized as a tax-saving instrument.
Deposits can be made individually or as a joint account. However, only the first account holder is entitled to the associated tax advantages.

Regarding the documents required-

Identity Proofs

Aadhar Card
Passport
Drivers License

Address proofs

Gas Bills
Utility Bills
Bank Statement
Or a Cancelled Bank Cheque

FAQs

Can I take a loan against my Tax-saving FD with ICICI?

You cannot avail of a loan against Tax-saving FDs due to the 5-year lock-in rule.

Do senior citizens get a higher interest rate on Tax-saving FDs?

Yes, ICICI Bank typically offers a preferential interest rate for senior citizens, which is higher than the regular deposit rates.

Is the interest earned on these FDs tax-free?

No, the interest earned on Tax-saving FDs is taxable per the individual's tax bracket. Only the invested amount (up to ₹1.5 lakhs) qualifies for a tax deduction.

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