Bank Fixed Deposit Deduction increased to Rs.1.5 under section 80c
Bank Fixed Deposit is one of the most opted tax saving instrument under section 80C while tax planning. To make this more alluring Central Government of India has via notification no. 63/2014, Dated: November 13, 2014, increased the deductible amount of fixed deposit aka term deposit u/s 80C by Rs.50,000 i.e. from the current limit of Rs.1,00,000 to Rs.1,50,000, keeping the term same of 5 years.
Recommended Read : Deduction under Section 80C limit Increased
The Full Notification is reproduced below:
Points to Ponder of the Scheme are:
- This scheme is available for the Individuals and Hindu Undivided Family (HUF) for the term deposit in the schedule banks of India.
- Joint FD is allowable but deduction is available only to the first holder.
- The tenure of the deposit should be 5 years, no more, no less and also the deposits cannot be encashed prior to date of maturity.
- Interest accrued on the deposits is taxable, thus shall be added to the income while filing ITR.
- TDS is to be deducted by bank if interest exceed Rs.10,000, in case your tax payable in NIL you can provide Form 15G/H to bank instructing not to deduct TDS.