Fixed deposits are taxable. But there are some exemptions that are aimed to benefit people with lower incomes and senior citizens. There is a tax exemption for everyone earning interest less than Rs. 40,000 on their fixed deposit. For senior citizens, this limit is Rs. 50,000.
Others can fill form 15G or 15H to be exempted from paying tax on their fixed deposits. These forms need to be submitted at the start of the fiscal year so your fixed deposit provider does not deduct tax (TDS) before paying out your interest.
Before going for a form 15G/H download, check which one you are eligible for:
- People aged up to 60 years, earning less than the Minimum Income Tax threshold, i.e. Rs. 2.5 lakhs per annum, can fill form 15G. Hindu Undivided Family and Trust can also fill this form.
- Those above 60 have to fill form 15H.
Form 15G/H download
- Visit the Income Tax Department’s website.
- Look for the forms in “Frequently Used Forms”.
- Download the PDF of the form relevant to you (15G if you are aged up to 60, 15H if you are more than 60).
- Fill the form with identification and income details.
- Submit 3 copies to your financier along with document proofs and photocopies of your PAN card.
You can also submit 15G and 15H online
- Visit your bank’s or Income Tax Department’s website.
- Search for form 15G/15H.
- Fill in details like name and address, PAN card number, incomes of the previous and current year.
- Attach your signature and submit the form.
Getting the best FD interest rates
You can earn more from your fixed deposits if you invest with a provider with best FD interest rates. Non-Banking Financial Institutions (NBFCs) give 1% to 2% higher interest rates than banks.
Bank rates also fluctuate depending on the market and RBI regulations. Bajaj Finance is an NBFC with one of the best FD interest rates in the country. The highest rate of interest that investors can avail with it is 8.05%.
Along with interest rates, the background of the financier and its credibility for giving stable returns to their customers should also be considered.
Bajaj Finance is the only Indian NBFC with an international rating of ‘BBB’ by S&P Global and its FD has India’s highest stability ratings with CRISIL’s FAAA/Stable rating and ICRA’s MAAA/stable rating. They have also introduced a new product in the Indian fixed deposit market – Systematic Deposit Payment (SDP).
With SDP, an investor chooses to make small monthly deposits, which earn interest separately as per the interest rate prevailing on the date of the deposit. This is great for early investors looking to reap the benefits of fixed deposits without the burden to deposit a large sum of money.
Investors can also go for premature withdrawal and an easy loan against their deposit with Bajaj Finance FD.
Get higher returns from your investments with the right FD provider.
Author Bio: Gaurav Khanna is an experienced financial advisor, digital marketer, and writer who is well known for his ability to predict market trends. Check out his blog at Highlight Story