How to Open a Tax Free Term Fixed Deposit ?

  • Thread starter Thread starter IndianMascot
  • Start date Start date
  • Replies Replies 10
  • Views Views 5,124

IndianMascot

Addicts
Messages
7,007
Location
NA
ISP
Reliance, Tata Photon + , MTNL 3G Jadoo
I am back after a long time with another investment related query. 😉
Since last few days i have been investing my mind to understand the FAQs of 5 Year Term Fixed Deposit Schemes which are Tax Free i.e no TDS. But unfortunately my thick skin brain is unable to understand their banking language. So, my question is :
1. How to go ahead for a Tax Free Fixed Deposit Scheme ?
2. Do TDS of 10% is charged on all Normal Fixed Limit or there is some Limit when not crossed remain Non-taxable.
3. How will interest be calculated. Monthly, Quarterly or Yearly ?
4. If interest is calculated quarterly or above, will the earned Interest amount be credited into my S/B account monthly or quarterly ?

I have more questions, 😀 but holding it till i get above answers . Hope my good old friends will reply back soon 🙂
 
@manu : let's take it simple. If I make a FD of 1 lac for 1 year. Will the interest earned e.g Rs 8750 will be taxable ?
chromaniac said:
PPF not good?
It's good but it has a limit and time frame to block the money is quite long. So, other than PPF, we need to explore more safe investments.
 
Yes, if your overall income exceeds the taxable amount. If you have a spouse/parents without taxable income, you can create it in their name. Then fill up form 15G/H and TDS would not be deducted.
 
Manu said:
Yes, if your overall income exceeds the taxable amount.If you have a spouse/parents without taxable income, you can create it in their name. Then fill up form 15G/H and TDS would not be deducted.
Well i was thinking of the same,but i remember filling pan card details for my mother&source of income was filled as no income..So if i open a FD in her name will TDS be applicable??
 


What I understood from bank faq is that it remains tax free until the interest amount do not exceed rs 10,000 per year per branch.
 
So is it still taxable if the person has no source of income and yearly interest is more than 10k?
Is a declaration that a person has no source if income not enough?
 
My parents have an account in a coop bank,but they have stopped issuing declaration forms with out pan number...So anyone without PAN card will not be allowed to fill form 15g/h?
 
I think BankBazaar have done pretty good job by creating a tool for Calculating Fixed Deposit which include Initial Investment, Interest Rate and Duration of investment. One can check it on website.
Just for Knowledge. Hope this helps in better way. 😛leasantry: