The Union Tax Saver Scheme can be held by Single individual or can be Joint holder type. The single holder shall be issued to an individual for him or her or under the norms of the Karta of the Hindu undivided family. The joint holder gets a deposit receipt jointly only to two adults or jointly to an adult and a minor and hence payable to either of the holders or the surviving member. Tax exemption is applicable under Section 80C of the Income Tax Act, for a single depositor or the specified first holder in the case of joint depositors, however within the eligible investments. The deposit amount is accepted in the form of DRIC or Fixed Deposit or the Monthly Income Scheme.
People who meet the following criteria, are eligible to apply:
|Rate of Interest||Rates of interest as applicable to general Term Deposits will apply. However senior citizens are eligible for an additional interest according to the extant policy of Union Bank. as on December 1, 2015. Rates are subject to change on the bank’s discretion.|
|Period (Multiple of 3 months)||
|TDS||Tax exemption is applicable under Section 80C of the Income Tax Act, for a single depositor or the specified first holder in the case of joint depositors, however within the eligible investments. The interest is however taxable.|
|Loan against Bank Scheme||You can pledge the scheme to secure a loan or use the scheme as security to any other asset, but only after the lock in period of 5 years. This is also subject to the terms and conditions governing such loans/advances.|
|Nomination (if any)||Nomination can be made for the deposit based on the extant guidelines. No nomination can be made with respect of a term deposit applied for and held by or on behalf of a minor.|
|Pre-withdrawals||The maturity period of term deposit receipt of any amount is a minimum five years that commences from the date of the receipt and the maximum being 10 years. No term deposit is allowed to be encashed before the expiry of 5 years from the date of its receipt.|
Rates of interest as applicable to general Term Deposits. However senior citizens are eligible for additional interest as per the extant policy of the Bank. The interest rate as of 15 December 2020 is 5.55% p.a. Rates are subject to change on the bank’s discretion.
Groups such as Firms, Societies, Institutions, Companies, Clubs, Trust, Corporates etc., cannot use this scheme.
The interest would be paid either as lofty amount at the time of maturity which is a minimum of 5 years or it can be paid quarterly or monthly depending on the regulatory guidelines for the payment of interest on the nature of term deposit chosen.
The term deposit receipt will include:
Yes, senior citizens are eligible for additional interest payments based on the Bank’s exacts.
The deposits for the scheme are accepted at all the Union Bank of India branches, existing in India.
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