To enforce retailers to less interest on 5 Years fixed deposits, the Finance Minister has

 announced in 2006 that all fixed deposits with a maturity of more than 5 years can be

 entitled to exemption U/s 80C as per Income Tax Act. 

Tax Savings Fixed Deposits: Guidelines

The Ministry of Finance has issued the following guidelines for investment in tax-saving fixed deposits.

Maturity: 5 years

Minimum investment: Rs.100 and its multiples

Maximum Investment: Rs.1,50,000

Discounts available: Private, HUF

Premature withdrawal: Not available

Loan facility against this FD: Not available

Tax on interest earned: According to the income tax slab rate of the individual

10% TDS on interest

The interest rate on this tax-saving fixed deposit is determined by the bank in which the investment is made.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Non-Government (Private) Employees for the Financial Year 2021-22 and Assessment Year 2022-23 U/s 115BAC

 

Feature of this Excel Utility:-

 

1) This Excel Utility Prepare Your Income Tax as per your option U/s 115BAC perfectly.

 

2) This Excel Utility has all amended Income Tax Section as per Budget 2021

 

3) Automated Income Tax Form 12 BA

 

4) Automated Calculation Income Tax House Rent Exemption U/s 10(13A)

 

5) Individual Salary Structure as per the Non-Govt (Private) Concern’s Salary Pattern

 

6) Individual Salary Sheet

 

7) Individual Tax Computed Sheet

 

8) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2021-22

 

9) Automated Income Tax Revised Form 16 Part B for the F.Y.2021-22

 

10) Automatic Convert the amount into the in-words without any Excel Formula

Tax savings Effective annual the interest rate on fixed deposits

The below-given table showing the interest earned.

S. No.	Particulars	Amount (Rs.)
		Slab Rate – 30%	Slab Rate – 20%	Slab Rate – 10%
A	Amount Invested	10,000	10,000	10,000
B	Immediate Tax Saving         (assuming 30% Slab Rate)	3090	2060	1030
C	Effective Investment  (A-B)	6910	7940	8970
D	Maturity Amt of Original Investment (Interest @8.5% p.a.)	13,382	13,382	13,382
E	Total Pre-Tax Benefit on Deposits (D-C)	6,472	5,442	4,412
F	Effective Annual Yield (5 years)	14%	12.50%	10.50%

In order to invest in such tax-saving fixed deposits which are allowed as exemption under section 80C, the investor has to submit an application for the same at the time of deposit and the banker has to provide a copy of his PAN card.

 

These investments can be made in a single name or joint name. If the investment is made in a joint name, only the 1st holder is eligible to claim the deduction and the second holder cannot make a deduction for Section 80C for such tax savings fixed deposit investment.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Assam State Government Employees for the Financial Year 2021-22 and Assessment Year 2022-23 U/s 115BAC

 

Feature of this Excel Utility:-

 

1) This Excel Utility Prepare Your Income Tax as per your option U/s 115BAC perfectly.

 

2) This Excel Utility has all amended Income Tax Section as per Budget 2021

 

3) Automated Calculation Income Tax House Rent Exemption U/s 10(13A)

 

4) Individual Salary Structure as per the Assam State Employee’s Salary Pattern

 

5) Individual Salary Sheet

 

6) Individual Tax Computed Sheet

 

7) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2021-22

 

9) Automated Income Tax Revised Form 16 Part B for the F.Y.2021-22

 

10) Automatic Convert the amount into the in-words without any Excel Formula

 

 

The difference between investing in PPF vs. Tax Saving Fixed Deposit

PPF, which is the best tax-saving option rather than a fixed deposit,

 

Read the proposal: The benefits of investing in a PPF account and the PPF interest rate

 

However, look at the below table difference between P.P.F. and F.D:-

Particulars	Tax Saving Fixed Deposit	PPF
Maturity	5 years	15 years
Deduction is available u/s 80C	Rs, 1,50,000	Rs. 1,50,000
Interest Rate	Fixed by the Bank*	Fixed by the Govt*
Tax on Interest earned	As per Income Tax Slab Rate	Exempt
Premature Withdrawl Facility	Not Allowed Maturity after 5 years	Available from 5th year onwards but only to a certain extent
Loan Facility	Not Allowed Maturity after 5 years	Can be availed from 3rd year onwards

However, the main difference between tax-saving fixed deposit and PPF is that the maturity of tax-saving FD is 5 years which is much less than the 15-year maturity of PPF.

 

Another big difference is that tax savings are taxable on interest earned in FDs where interest earned in PPF is tax-free. However, the major difference between PPF and Tax Saving F.D is its duration also the fact that the earned interest from the F.D will be taxable but the earned interest  PPF is tax-free.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Bihar State Government Employees for the Financial Year 2021-22 and Assessment Year 2022-23 U/s 115BAC

 

Feature of this Excel Utility:-

 

1) This Excel Utility Prepare Your Income Tax as per your option U/s 115BAC perfectly.

 

2) This Excel Utility has all amended Income Tax Section as per Budget 2021

 

3) Automated Calculation Income Tax House Rent Exemption U/s 10(13A)

 

4) Individual Salary Structure as per the Bihar State Employee’s Salary Pattern

 

5) Individual Salary Sheet

 

6) Individual Tax Computed Sheet

 

7) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2021-22

 

9) Automated Income Tax Revised Form 16 Part B for the F.Y.2021-22

 

10) Automatic Convert the amount into the in-words without any Excel Formula

 

Since the interest on PPF is tax-free, the effective interest on PPF is higher than the effective interest on savings FDs. However, the extra interest comes with higher maturity. Both tax-saving fixed deposit and PPF accounts can now be opened in banks as well.

 

PPF is a better instrument than a tax saving fixed deposit.  He should choose PPF otherwise he should choose tax saving fixed deposit.

 

And if you have already invested a maximum amount of Rs 1.5 lakh in PPF, then you can invest in a tax-saving fixed deposit.

You may also, like- Automated Income TaxPreparation Excel Based Software All in One for the West Bengal State Government Employees for the Financial Year 2021-22 and Assessment Year 2022-23 U/s 115BAC

 

Feature of this Excel Utility:-

1) This Excel Utility Prepare Your Income Tax as per your option U/s 115BAC perfectly.

 

2) This Excel Utility has all amended Income Tax Section as per Budget 2021

 

3) Automated Calculation Income Tax House Rent Exemption U/s 10(13A)

 

4) Individual Salary Structure as per the West Bengal State Employee’s Salary Pattern(After ROPA 2019)

 

5) Individual Salary Sheet

 

6) Individual Tax Computed Sheet

 

7) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2021-22

 

9) Automated Income Tax Revised Form 16 Part B for the F.Y.2021-22

 

10) Automatic Convert the amount into the in-words without any Excel Formula

 

Tax Saving Fixed Deposit vs. Tax-Free Bond

Tax-free bonds are bonds that are issued with the permission of the central government and the issue is open for a certain period of the year as compared to a fixed deposit of tax protection which can be opened at any time of the year.

Interest earned on these tax-free bonds is completely tax-exempt. However, the money invested cannot be claimed as a deduction under section 80C.

Read the proposed: Tax-free bonds: You should invest in them

Tax-free bonds and tax savings fixed deposits are compared here: -

Particulars	Tax Free Bonds	Tax Saving Fixed Deposit
Deduction under Section 80C for amt invested	Not Available	Available
Option to invest	Can only be invested when the issue opens	Can be invested anytime during the year
Tax on Interest earned	Exempted	Taxable
Maturity	10-20 years	Min 5 years
Option to sell before maturity	Can be sold on Stock Exchanges	Cannot be redeemed before maturity

 

 

Conclusion,

Tax saving fixed deposit and tax-free bonds are 2 completely different instruments that cannot be compared. The advantage of tax-saving fixed deposit is that the principal investor is exempt from tax i.e. it can be claimed as exemption under section 80C and the advantage of a tax-free bond is that the interest is exempt from income tax collection.

Download Automated Income Tax Preparation Excel Based Software All in One for the Government & Non-Government (Private) Employees for the F.Y.2021-22 and A.Y.2022-23

 

Feature of this Excel Utility:-

 

1) This Excel utility prepares and calculates your income tax as per the New Section 115 BAC (New and Old Tax Regime)

 

2) This Excel Utility has an option where you can choose your option as New or Old Tax Regime

 

3) This Excel Utility has a unique Salary Structure for Government and Non-Government Employee’s Salary Structure.

 

4) Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the F.Y.2000-01 to F.Y.2021-22 (Update Version)

 

5) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2021-22

 

6) Automated Income Tax Revised Form 16 Part B for the F.Y.2021-22

 

 

On September 13, 2021 by www.taxexcel.net

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 Income tax allowances and deductions for F.Y.2021-22. Salary employees constitute a

 major part of the overall taxpayers of the country and their contribution to tax collection

 is significant. Income tax deductions provide a wide range of tax-saving

 opportunities for the salaried class. With the help of these deductions and deductions,

 one can significantly reduce his taxes.

 

Most valuable as well as common deductions and allowances U/s 80 C are available to salary individuals.

Exemption of allowance

House rent allowance

A salaried person with rented accommodation can avail of the benefit of HRA (House Rent Allowance). It can be fully or partially exempt from income tax. However, if you do not live in rented accommodation and still continue to receive HRA, it will be taxable. If you cannot submit a rent receipt to your employer to claim an HRA, you can claim a waiver at the time of filing your income tax return. So, please keep the rent receipt and proof of any payment for the rent.

You may also, like- Automated Income TaxPreparation Excel Based Software All in One for the Assam State Govt Employees for F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet + Automated H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part A&B and Part B for F.Y.2021-22]

You can claim at least one of the following as an HRA discount.

A. Total HRA received from your employer

B. Rent paid 10% less (basic salary + DA)

C. 40% of salary for non-metro (basic salary + DA) and 50% of salary for metro (basic salary + DA)

Standard deduction

The Finance Minister of India, while presenting the Union Budget 2018, announced a standard deduction U/s 16(ia) amounting to Rs. 40,000 for salaried employees. It was a transport allowance (Rs. 19,200) and medical compensation (Rs. 15,000). As a result, salaried people can get additional income tax exemption. 5,800 in FY2019-1Y.

 

The money limit has been increased by Rs 40,000 to Rs 50,000 in the interim budget 2019.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the West Bengal State GovtE Employees for F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet + Automated H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part A&B]

Release Travel Allowance (LTA)

The Income Tax Act provides for LTA exemption for salaried employees, which is limited to travel expenses during their holidays. You can claim LTA twice in a four-year block. If a person does not use this discount in the block, he can carry it to the next block. The following are the restrictions applicable to LTA:

LTA is not only the cost of domestic travel and international travel

This type of travel method must be by rail, air travel or public transport

Child allowance 

Children education allowances as part of your salary. Such allowances received by the employer for the education of children is exempt from tax. 

However, the children education allowances for two children @ Rs.100 P.M.

Approved subtraction

Sections 80C, 80CCC and 80CCD (1)

Section 80C is the commonly used option for income tax exemption up to Rs.1.5 Lakh. Expenditure/investment within 80C from income generated due to capital gain is not allowed. This means that if a person's income only includes capital gains, then section 80 cannot be used for tax protection. Some of these investments are eligible for discounts up to a maximum of Rs 1.5 lakh under Sections 80C, 80CCC and 80CCD (1).

You may also, like- Automated Income TaxPreparation Excel Based Software All in One for the Bihar State Govt Employees for F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet + Automated H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part A&B]

 

Section 80D exemption limits are:

25,000 for a premium paid for oneself / family.

Rupees 50,000 for premium for senior citizen parents.

In addition, health checks of Rs 50,000 are also approved and covered in the overall range.

Discount up to Rs. 10,000 for medical expenses incurred by senior citizens (years 60 years or more) or senior citizen parents up to Rs.40000/-

The taxpayer can claim a maximum rebate of Rs. 5,000. 50,000 including the amount of premium and medical expenses if he is a senior citizen

(60 years or more). In addition, if he pays the medical bills of his senior citizen parents, he can claim an additional discount of up to Rs 10,000. 50,000.

You may also, like- Automated Income Tax Preparation Excel Based Software All in One for the Andhra Pradesh State GovtEmployees for F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet + Automated H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part A&B]

 

Home Loan Interest (Section 80C and Section 24)

Another capital-saving tool is interest on home loans. Max Limit Rs. 2 lakh as a discount for interest on home loans for self-occupied property.

 

In addition to the above, one can claim up to a maximum limit of Rs 1.5 lakh under Section 80C, the main component of repaying a housing loan.

 

Grants (Section 80G)

Section 80G of the Income Tax Act, 1961 proposes deduction of income tax to an appraiser who donates to charities. This discount varies depending on the recipient organization, which means anyone can get a 50% or 100% discount on the amount donated, with or without restrictions.

You may also, like- Automated Income TaxPreparation Excel Based Software All in One for the Jharkhand State Govt Employees for F.Y.2021-22[This Excel Utility can prepare at a time your Tax Computed Sheet + Automated H.R.A. Exemption Calculation U/s 10(13A) + Automated Income Tax Form 16 Part A&B]

 

 Savings Account Interest Reduction (Section 80TTA)

Section 80TTA of the Income-tax Act, 1961 offers a rebate of up to INR 10,000 on income earned from savings account interest. This discount is available for individuals and HUFs. If the bank's interest income is less than INR 10,000, the entire amount will be deducted.

 

However, if the bank's interest income is more than INR 10,000, the next amount will be taxable.

 

Home Loan Interest (Section 80EE)

Section 80E allows homeowners to claim an additional Rs. 50,000 (Section 2) for the interest portion of the home loan EMI. Subject to the following:

The loan must not exceed Rs. 35,00,000

The cost of the property can not exceed Rs.50,00,000.

The person must not have any other property registered in his name at the time of granting the individual. 

Download Automated Income Tax Preparation Excel Based Software All in One for the Government and Non-Government (Private) Employees for the Financial Year 2021-22 and The assessment Year 2022-23 U/s 115BAC

 

Feature of this Excel Utility:-

1) This Excel Utility Prepare Your Income Tax as per your option U/s 115BAC perfectly.

 

2) This Excel Utility has all amended Income Tax Section as per Budget 2021

 

3) Automated Income Tax Arrears Relief Calculator U/s 89(1) with Form 10E from the F.Y.2000-01 to F.Y.2021-22 (Updated Version)

 

4) Automated Calculation Income Tax House Rent Exemption U/s 10(13A)

 

5) Individual Salary Structure as per the Govt and Private Concern’s Salary Pattern

 

6) Individual Salary Sheet

 

7) Individual Tax Computed Sheet

 

8) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2020-21

 

9) Automated Income Tax Revised Form 16 Part B for the F.Y.2020-21

 

10) Automatic Convert the amount into the in-words without any Excel Formula

On September 12, 2021 by www.taxexcel.net

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