How to Open a Tax Free Term Fixed Deposit ?

[IndianMascot]

I am back after a long time with another investment related query. 😉
Since last few days i have been investing my mind to understand the FAQs of 5 Year Term Fixed Deposit Schemes which are Tax Free i.e no TDS. But unfortunately my thick skin brain is unable to understand their banking language. So, my question is :
1. How to go ahead for a Tax Free Fixed Deposit Scheme ?
2. Do TDS of 10% is charged on all Normal Fixed Limit or there is some Limit when not crossed remain Non-taxable.
3. How will interest be calculated. Monthly, Quarterly or Yearly ?
4. If interest is calculated quarterly or above, will the earned Interest amount be credited into my S/B account monthly or quarterly ?

I have more questions, 😀 but holding it till i get above answers . Hope my good old friends will reply back soon 🙂

 

[manu1991]

http://www.axisbank.com/personal/deposits/tax-saver-fixed-deposit/tax-saver-fixed-deposit-features.aspxandhttp://www.hdfcbank.com/personal/products/accounts-and-deposits/deposits/5-year-tax-saving-fixed-deposittells me the max. you can invest for tax deduction is 1 lac and TDS is applicable.

 

[Sushubh]

PPF not good?

 

[IndianMascot]

@manu : let's take it simple. If I make a FD of 1 lac for 1 year. Will the interest earned e.g Rs 8750 will be taxable ?

PPF not good?

It's good but it has a limit and time frame to block the money is quite long. So, other than PPF, we need to explore more safe investments.

 

[manu1991]

Yes, if your overall income exceeds the taxable amount. If you have a spouse/parents without taxable income, you can create it in their name. Then fill up form 15G/H and TDS would not be deducted.

 

[sri]

Yes, if your overall income exceeds the taxable amount.If you have a spouse/parents without taxable income, you can create it in their name. Then fill up form 15G/H and TDS would not be deducted.

Well i was thinking of the same,but i remember filling pan card details for my mother&source of income was filled as no income..So if i open a FD in her name will TDS be applicable??

 

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[IndianMascot]

What I understood from bank faq is that it remains tax free until the interest amount do not exceed rs 10,000 per year per branch.

 

[moindear]

So is it still taxable if the person has no source of income and yearly interest is more than 10k?
Is a declaration that a person has no source if income not enough?

 

[sri]

My parents have an account in a coop bank,but they have stopped issuing declaration forms with out pan number...So anyone without PAN card will not be allowed to fill form 15g/h?

 

[Narendra Pratap]

I think BankBazaar have done pretty good job by creating a tool for Calculating Fixed Deposit which include Initial Investment, Interest Rate and Duration of investment. One can check it on website.
Just for Knowledge. Hope this helps in better way. 😛leasantry:

 

[Sushubh]

Spammer above.

https://www.youtube.com/watch?v=uXQWgjTI2Rc