Income Tax News: Exciting news for taxpayers! There’s a golden opportunity to save big on income tax – an investment avenue that offers substantial tax exemptions of up to Rs 1.5 lakh. Let’s unravel the details and explore how this investment option can lead to significant tax savings.
Fixed Deposits stand as India’s go-to investment, offering security and guaranteed returns. While traditional FDs provide a lump sum at maturity, there’s a lesser-known gem – the Fixed Deposit Monthly Income Plan. This plan ensures a steady monthly income, transforming the way you benefit from your investment.
Monthly Income Plan Options
Explore the two facets of FD schemes – Cumulative FD and Non-Cumulative FD.
- Cumulative Fixed Deposit (FD): In a Cumulative FD, your interest keeps growing with the principal amount throughout the deposit period. You receive the total sum, including both the initial amount and accumulated interest, at the end of the tenure. It’s like watching your money grow over time.
- Non-Cumulative Fixed Deposit (FD): With a Non-Cumulative FD, you get regular payouts at fixed intervals. You can choose how often you want to receive this income—monthly, quarterly, half-yearly, or annually. It’s a straightforward way to have a steady income flow that suits your needs.
Key Features of Monthly Income Plan
- Zero Processing Fee: Start this scheme without worrying about additional costs.
- Flexible Deposits: Invest any amount, ranging from a minimum of Rs 1000 to your chosen maximum.
- Stability in Market Fluctuations: Despite market changes, enjoy monthly returns at a fixed interest rate, ensuring a secure investment.
- Loan Facility: Need funds urgently? Avail a loan against your Fixed Deposit Monthly Income Scheme.
- Easy Withdrawals: Meet financial needs by withdrawing funds anytime through a straightforward formality.
Ideal for Senior Citizens
Tailored for senior citizens, the Monthly Income Plan becomes a reliable source of regular income, combining safety and returns. Unlike Cumulative FDs, where money is received only at maturity, this plan ensures a constant flow of funds every month or quarter.
Tax Rules and Exemptions
Investors in tax saver fixed deposit accounts enjoy tax exemptions up to Rs 1,50,000 annually under Section 80C of the Income Tax Act. However, if your annual return exceeds Rs 40,000, the bank deducts 10% TDS. Senior citizens have a higher limit of Rs 50,000.
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