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    Indian Bank Tax Savings Certificate

    Paying tax is the responsibility of every eligible citizen of India and while it may seem like an additional financial burden, it is essential for the overall growth of the country. Tax saving instruments are extremely popular investment options for a majority of the working community and Indian Bank offers a Tax Savings Certificate specially designed to benefit the common taxpayer. This reinvestment plan deposit can go a long way in planning your finances aiding your lifestyle.

    Eligibility criteria for IB Tax Savings Certificate

    The basic eligibility criteria for Indian Bank Savings Certificate are mentioned below.

    • Individual account – An individual account can be opened by citizens who have a PAN card, signalling that they pay income tax.
    • Joint account – A joint account can be opened by two adults or an adult and a minor.
    • Minimum Amount – A minimum deposit of Rs 1,000 must be made.

    Features of Indian Bank Tax Savings Certificate

    Some of the salient features are mentioned below.

    Account Type Single/Joint Reinvestment Plan Deposit
    Amount This account can be opened in 5 denominations, viz.
    • Rs 1,000
    • Rs 5,000
    • Rs 10,000
    • Rs 50,000
    • Rs 1 lakh
    Rate of Interest 7 % per annum to 8 % per annum
    Period/Tenure 5 years
    TDS The interest component is liable for income tax deduction as per the existing laws
    Loan against IB Tax Savings Certificate   No loan facility available
    Nomination Yes
    Auto Renewal NA

    Indian Bank Tax Savings Certificate Interest Rates

    The interest rates offered under this scheme vary depending on the age of an individual and his/her association with the bank. The interest rates mentioned below are for December 2015 and are subject to change.

    Tenure Interest rate for senior citizens Interest rate for general public Interest rate for staff members
    5 years 7.5 % per annum 7 % per annum 8 % per annum

    Note: Interest rates offered by Indian Bank are subject to change at their discretion.

    Indian Bank Tax Savings Certificate FAQs

    1. What is the major purpose of this scheme?

      This scheme was launched with the intention of providing tax relief to depositors under Section 80C of the Income Tax Act.

    2. In the case of a joint account, are both members eligible for tax deductions?

      No, only one member can avail tax benefits in a joint account. The first holder of the account can claim the benefits, whereas the second member is not entitled to any deduction.

    3. What are the PAN requirements associated with this scheme?

      Under this scheme, an individual is expected to incorporate the PAN details in the CIF. The deposit receipt should also have this information apart from the signature of the person.

    4. How much can a particular initial investment amount to at maturity?

      The amount one gets at maturity depends on the interest rate one is entitled to, with different individuals eligible for different rates. For example, a sum of Rs 50,000 would amount to Rs 70,739/- if the scheme is utilised by a member of the general public, Rs 72,497/- if a senior citizen opts for this scheme and Rs 74,297/- if it is a staff member. These amounts can be collected at the end of 5 years.

    5. On what basis will interest be liable to tax?

      The accrued interest will be liable for tax on an annual basis, with provisions of the Income Tax Act dictating the terms.

    Useful Information on Indian Bank Fixed Deposit

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