Fixed Deposits

Fixed deposits are a great way to build a corpus in the long run and also earn a regular income. The recent changes in the tax rebate limit have made them more preferable by many investors. At the time of interest payout on your fixed deposit, your bank/NBFC is supposed to deduct an amount as tax. This is the TDS on the interest earned from your fixed deposit. But there are provisions to save this tax and earn more from your investments.

Central Board of Taxes (CBDT) has modified the provision that allowed tax exemption on interest up to Rs. 10,000. Now an investor does not need to pay any tax on the interest earned on their fixed deposit if the interest is not more than Rs. 40,000. For senior citizens, this limit is Rs. 50,000.

What is form 15G and form 15H?

There is further relief for people with non-taxable income. If your income is below the minimum income tax threshold of Rs. 2.5 lakhs and the interest earned on your fixed deposit is more than 40,000 you can still avoid paying taxes by filling form 15G. Senior citizens, or investors aged 60 years or above, need to fill form 15H. These investors need to submit their form right at the start of the fiscal year to make sure that tax is not deducted from their interest.

How to fill form 15G and 15H?

You will need your PAN card to fill in these forms.

The traditional way to fill the form is downloading the PDF of the relevant from your bank’s; or Income Tax Department’s website. Get 3 copies of the form and submit it with the copies of your PAN card.

To fill the form right from the comfort of your home, you need to login to your bank’s website or visit the Income Tax Department’s website and look for the form. Once you find it, fill the details online and submit with your signature.

Diversifying your fixed deposits portfolio will also help you save TDS. Strategize and split your savings in such a way that all of it does not mature in the same year. Before investing, you can foresee the expected returns with an online calculator and plan accordingly. It is also important to choose the right fixed deposit product. Bajaj Finance FD is currently one of the most profitable fixed deposits. Exceptionally high interest rates of up to 8.95% make Bajaj Finance FD a far better option than most other NBFCs and banks. Bajaj Finance FD also offers a minimum 51% ROI (Return on Investment) which is hardly available with bank FDs. Highest stability ratings from ICRA and CRISIL reinforce Bajaj Finance FD’s position as one of the country’s best fixed deposit investment products.

You can use multi-deposit facility with Bajaj Finance FD to invest a single lump sum amount into multiple FDs and ladder your FD investments in such a way that you do not cross the annual TDS exemption limit. Even if you withdraw one FD, returns from other FDs will not be affected. Also, with Experia- your online fixed deposit account, it is easy to track and manage multiple FDs from the comfort of your home.

Thus, with careful planning and correct tools, you can ensure that you make the most from your FD investments, with minimal TDS deduction.


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