Tax-Free Benefits of Fixed Deposits in India: What You Need to Know

Discover how much of your Fixed Deposit is tax-free in India and maximize your savings under Section 80C.

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Fixed Deposits (FDs) in India come with a tax deduction benefit under Section 80C of the Income Tax Act. You can claim a deduction up to ₹1.5 lakh per financial year. However, the interest earned on these FDs is taxable as per your income tax slab. To ensure maximum tax savings, explore other Section 80C options in conjunction with your FD investments.

FAQs & Answers

  1. What is the maximum tax deduction limit for Fixed Deposits in India? The maximum tax deduction limit for Fixed Deposits in India under Section 80C is ₹1.5 lakh per financial year.
  2. Is the interest earned on Fixed Deposits taxable? Yes, the interest earned on Fixed Deposits is taxable based on your income tax slab.
  3. How can I maximize tax savings on my Fixed Deposits? You can maximize tax savings by exploring other investment options under Section 80C alongside your Fixed Deposits.
  4. Are there any tax benefits for Senior Citizens on Fixed Deposits? Yes, Senior Citizens can avail of certain tax benefits on interest earned from Fixed Deposits under the Income Tax Act.