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Save up to ₹46,800 in taxes by investing in these FDs


When it comes to saving taxes, people look for investment options such as mutual funds, life insurance, home loans, or fixed deposits that allow them to claim tax deductions. In such cases, they can save the maximum of their taxable income if they invest 1.5 lakh.

However, the projection of returns linked to such tax savings avenues differs. Some investment avenues provide returns linked to the market, and some can give you lesser returns which may not beat inflation in the long run. Some investment avenues can give you guaranteed returns. So, depending on your risk profile, you should choose the investment avenue to park your money for tax-saving purposes.

If you are a conservative investor looking for guaranteed returns, you can invest in tax savings FDs. You can claim an income tax deduction under Section 80C of the income tax act by investing a maximum of 1.5 lakh. This way, if your gross annual income is more than 10 lakh, you can maximise your tax savings by up to 46,800.

Data as on respective banks' website on 21 Sep 2022; Compiled by BankBazaar.com

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Data as on respective banks’ website on 21 Sep 2022; Compiled by BankBazaar.com

“The tax saving FDs can be a useful tool to save taxes under section 80C. The savings from funds invested in tax-saving FDs will vary depending on the tax bracket. For a person in the 30% bracket, the tax on 1,50,000 is 45,000 plus Education Cess of Rs.1,800 at 4% of 45,000. You can claim a total tax deduction of 46,800 in a year. For a person in the 20% bracket, the tax on Rs.150,000 comes to Rs.30,000 plus Education Cess of Rs.1200 at 4% of Rs.30,000. The total deduction, in this case, comes to Rs.31,200,” Adhil Shetty, CEO of BankBazaar.com, explained. However, it would help if you opted for the old tax regime to claim such tax benefits.

Disclaimer: The interest rate of all listed (BSE) Public & Pvt Banks considered for data compilation (Except Foreign banks and Small Finance Banks); Banks for which data is not available on their website are not considered. The table includes only Tax Saving FDs (for non-senior citizens) for a 5-Year tenure. Top 5 Public and Pvt. Banks are listed in their respective categories in descending order, i.e., the bank offering the highest interest is placed at the top and the lowest at the bottom.

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