Things you should know regarding recent changes about tax and interest rates
Starting August 1, several changes regarding tax and interest rates will come into effect. Here are the things that you need to know.
The Goods and Services Tax Council in its last meeting decided to cut the tax rate on electric vehicles by 7%. With effect from August 1, the GST rate on all EVs and the tax rate on chargers or charging stations for EVs will be 5%. The GST Council in its meeting has also approved GST exemption for hiring of electric buses (having a capacity of carrying more than 12 passengers) by local authorities from the first day of next month.
Other changes that will come into effect from August 1 is the waiver of IMPS charges and a cut in the fixed deposit interest rates by State Bank of India. The country’s largest lender has decided to do away with IMPS charges when it comes to its YONO (You Only Need One), mobile banking, and internet banking customers. For bank branches, a waiver on IMPS charges has been announced by the bank for fund transfer up to Rs.1,000. When it comes to changes in the rate of interest offered on fixed deposits, the bank has revised it for all maturities.
1 August 2019
IT department to pre-fill your FD interest details in ITR-1
In a new development, the income tax department will pre-fill all the details pertaining to your salary, interest earned on fixed deposit (FD), and TDS in ITR-1. Earlier, these details had to be filled in manually by individuals while filing their returns. However, the details will be pre-filled only for online forms.
The facility is available only for tax-filers who are eligible for ITR-1. You have to visit the e-filing website (www.incometaxindiaefiling.gov.in) to enjoy this facility. As per reports, the software will extract data from Form 26AS by using your PAN and TDS filed by your employer. However, if you are using Java or Excel to file your ITR-1, you have to do it manually.
The tax department has revised the format for Form 16 and Form 24Q this year. Additionally, the format in which you have to put your salary details in ITR-1 is same as Form 16.
2 July 2019
Investing in tax-saving fixed deposits can help you get good returns
There are a variety of investment options available to individuals which help them to save tax under Section 80C of the Income Tax Act. While most of the investment option offer good returns, there is some sort of risk involved. In such circumstance, investing in Tax Saver FDs is a safe option given the fact that it offers guaranteed returns and the interest rate is locked for the entire tenure of the FD. Most banks and NBFCs in the country offer interest rates up to 7.85% p.a. to the general public and 8.35% p.a. to senior citizens for opening a tax saver FD.
While the country’s largest lender SBI offer an interest percentage of 6.85% p.a. on tax saver term deposits, banks like Lakshmi Vilas Bank, IDFC Bank, and RBL Bank offer individuals 7.85%, 7.75%, and 7.60% p.a. on the deposits.
2 May 2019
Different investment options for Diwali bonus
The Diwali season usually brings in a financial bonus for employed individuals. It is recommended to learn about the different investment schemes available in the market. This could help one to boost their savings and ensure high returns.
In case of a short-term investment, Fixed Deposits (FDs) or a short-term trade fund could be a viable option. FDs are a safe investment option as they are not affected by the market fluctuations. Recently, many banks have increased FD rates to up to 8.50% p.a. for select tenures.
If one is considering a long-term investment i.e. 3-5 years, schemes such as Tax Saving FD, National Savings Certificates, PPF account and Sukanya Samriddhi Account are recommended options. If one’s net income comes under the 5% of the income tax margin, a Tax Saving FD could earn them good returns at the end of the tenure. Another suggested option is Kisan Vikas Patra which can be obtained from a post office.
For investors who have an appetite for risk, mutual funds is a recommended option. Unlike FDs, mutual funds can be affected by the trends of the market. However, if chosen wisely, they can bring in higher returns than FD. Another option is to purchase Gold ETF.
24 October 2018
Highest FD Rates offered by Indian Banks on Tax Saver Fixed Deposits
Tax Saver Fixed Deposit schemes lets an individual avail tax benefits as per Section 80C of the Income Tax Act 1961. The highest interest rates (p.a.) offered by Indian banks are 8.25% by the IDFC Bank, 8.00% by AU Small Finance Bank, 7.75% by DCB Bank, 7.60% by Lakshmi Vilas Bank and 7.25% by RBL Bank. All the aforementioned banks offer an additional rate of 0.50% to the senior citizens.
Tax Saver term deposit comes with a minimum lock-in tenor of 5 years. An account holder cannot withdraw funds before the completion of 5 years. The interest earned is taxed under Tax Deducted at Source (TDS) as per the IT Act, 1961. The investor can opt to receive the interest payout on a monthly, quarterly, half yearly or annual basis.
31 August 2018
Tax saving FDs to invest in before March 31
As we are all rushing to make last minute investments before March 31, 2018, FDs can be a good option. There are various 5-year tax saving Fixed Deposits (FDs) in the market through which investors can claim deductions of up to Rs.1.5 lakh under Section 80C of the Income Tax Act. Banks such as ICICI, Axis Bank, SBI and HDFC offer tax saver fixed deposits.
The SBI tax saver scheme pays interest at the rate of 6.50% per annum at present, while senior citizens get 7.00% per annum. SBI recently revised the interest rates offered on FDs, which was with effect from 28 February, 2018. Rates were increased by around 10 to 75 basis points. ICICI Bank currently pays the same rate of interest as SBI. On the hand, an Axis Bank tax saver term deposit can fetch you interest at the rate of 6.90% per annum and 7.40% per annum for senior citizens.
Even on this type of deposit, an investor can choose to go for a non-cumulative investment, through which interest is paid out at regular intervals. The principal that is invested is completely tax-free and TDS will only be deducted if the interest earned in a given financial year is more than Rs.10,000 and more than Rs.50,000 for senior citizens.
15 March 2018
NSC or tax saving FD: What to choose
Both National Savings Certificate (NSC) schemes and tax saving Fixed Deposits (FDs) offer tax benefits under Section 80C of the Income Tax Act in India. The confusion, however, is what to go for.
Both these investment schemes offer a tax benefit of up to Rs.1.5 lakh. In case of NSCs, the interest that is earned is reinvested and this re-invested interest income does not fall under the tax bracket. However, in the case of term deposits the interest earned will be taxable but only if the total income earned from the deposit is more than Rs.10,000 in a given financial year.
25 January 2018
Want your FD to work as a tax saver? Invest in Tax Saver FD
Fixed Deposits have always been the first choice among investors when they think of investing. This is because they are considered as a safe option with there being no risks and the guarantee of high returns. However, all the FDs does not enable the investors to save taxes. If you are looking to earn higher returns as well as cut down the amount of taxes paid the best option available is investing in tax saver fixed deposits. Tax Saver FD allows investors to cut down on their tax liability as well as avail tax benefits. Like other FDs, tax saving FD also ensures of guaranteed higher returns. However, the biggest benefit that it offers is that it enables an investor to get tax deduction of upto Rs. 1.5 lakh under section 80C. This type of FD also enables the investor to name a nominee who can withdraw the amount after the tenure gets over, in case of the investor’s death.
30 December 2017
Save tax with bank fixed deposits
Tax saver bank Fixed Deposits (FD) are a great way to save tax. With these FDs, investors can claim a deduction of up to Rs.1.5 under Section 80C of the Income Tax Act.
It is very easy to open a tax-saver FD and this can be done at the click of a button online. The interest offered on these types of term deposits is the same as that give on other regular FDs. At present, ICICI Bank offers an interest rate of 6.5% on tax saver FDs, while SBI and HDFC Bank, offers 6% interest on these types of FDs.
Here are some things you need to know about tax saver FDs:
Income tax saving deposits come with a minimum lock-in period of 5 years
The interest earned on these deposits is taxable but the principal invested is exempt from tax
If you hold a joint FD, the first holder will get a tax benefit
Investors can choose from a wide range of payout options
TDS is applicable only if the interest earned on the term deposit is more than Rs.10,000 in a given financial year
21 December 2017