Tax-saving FDs are one of the ways an individual can reduce their tax outgo and also earn an assured guaranteed income, however, tax-saver FDs come with a mandatory lock-in period of five years. You can invest a maximum amount of Rs 1.5 lakh in a tax-saving FD. Under section 80C of the Income-tax Act, 1961 an individual would get a tax deduction of the amount invested in eligible investments. However, it must be noted that any income arising from selling these eligible investments for which the Section 80G deduction was claimed would be taxable in the hands of the taxpayer. “Many taxpayers opt for 5-year tax-saving fixed deposits (FDs) to claim a tax deduction. Although the initial…
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