Income Tax: Investing in a 5-year FD is one of the best options to get income tax exemption. In this, along with keeping the money safe, returns are also good. However, let us tell you that on investing in a five-year FD, exemption under 80C is available only in the old tax regime. There is no exemption of 80C in the new tax regime.
This has also become the default tax regime for the financial year 2024. Most all banks offer the option to invest in tax saving FD. You can open your five year FD wherever you have a savings account.
HDFC Bank Tax-Saving FD: How to open
According to HDFC Bank, if you already have a bank account, you can open an FD by visiting the nearest branch or using your netbanking account. If you already have an account in HDFC Bank then you can open FD through your internet banking.
Go to your netbanking account. Click on FD option. Enter your branch, time period and amount and create a nominee. After this press the Continue button and verify. After this download the FD deposit receipt.
If you have an HDFC Bank account and want to open an FD in your nearest bank branch, download the FD application form before visiting the bank. Fill all the required information in the form and take a photocopy of the KYC document.
You will have to take all the original documents to your branch for KYC verification. HDFC Bank is offering up to 7.75% interest on its tax-saving FD. Tax saving FD has a lock-in period of 5 years.
Investors can claim tax exemption under Section 80C of the Income Tax Act up to a limit of Rs 1.5 lakh for investing in tax saving FDs. However, the interest received on FD will be taxable. Senior citizens can claim an additional tax exemption of Rs 50,000 under section 80TTB of Income Tax on the interest received on FD.
