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ICICI Bank Tax Saving Fixed Deposit

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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