Tax-Saving FD: A fixed deposit (FD) might be a good option for people who want to save money on taxes before the fiscal year 2023 ends. Many banks and mail depots offer expense saving FDs with a development time of five years. If you’ve already looked into other options like post office plans, the National Pension System (NPS), home loans, and mutual funds, this one could help you save the most money on taxes.
Tax saving FDs are available from SBI, HDFC, ICICI, DCB, and AU Small Finance Banks at interest rates ranging from 6.50 percent to 7.60 percent. You can save tax under section 80C of the Income Tax Act of 1961 by investing in a tax-saving FD. However, tax exemptions are only available to those who opted for the previous system. The ability to save money on taxes through FDs is no longer available under the new tax system.
Keep in mind that only individuals and Hindu Undivided Families (HUFs) are eligible to invest in tax-saving FDs. With the assistance of their parents, minors can invest. A tax-saving FD can only have a maximum investment of Rs. 1.5 lakhs.
Additionally, tax-saving FDs have a five-year maturity period, and no loan permits or withdrawals can be made prior to that time. Before making an investment in a tax-saving FD, it is essential to take into consideration your liquidity needs and financial objectives.
A tax-saving FD may be a good option if you want to save money on taxes before the fiscal year 2023 ends. This option can help you save taxes under section 80C of the Income Tax Act of 1961, and many banks offer it with attractive interest rates. However, prior to investing, it is essential to take into consideration the maturity period and liquidity requirements.