How to open tax saving fixed deposit in ICICI Bank

The principal amount invested as a tax saving FD is allowed as a deduction to the first holder of the FD under Section 80C of the Income Tax Act. The maximum deduction allowed in a financial year is Rs. 1,50,000. It is possible to open a tax saving fixed deposit for minors as well. These tax saving deposits can serve as important means of financial planning for them.

According to the Bank of Baroda website, "The exemption limit for TDS deduction on FD is as per income tax guidelines. However as per the current guidelines, the exemption limit for TDS deduction on FD for individuals except senior citizens is Rs. 40,000, and for senior citizens, the exemption limit is Rs. 50,000. Also, individuals with a total taxable income of less than Rs. 2.5 lakh are eligible for exemption from paying TDS on their FDs."

Forms 15G and 15H must be submitted to the relevant bank in order to receive TDS relief on FD. In order to avoid having TDS withheld from FD interest income since the account holder's income falls below the basic exemption level, they must submit these self-declaration documents to the bank where they have an FD account. If a depositor has an annual income of less than Rs. 2.5 lakh (or Rs. 3 lakh for senior citizens) and there is no tax owed, they must file Form 15G or Form 15H with the bank asking them to withhold TDS from interest income from fixed-rate deposits (FDs) that exceeds Rs. 40,000 (or Rs. 50,000 for senior citizens).

DCB Bank offers an interest rate of 7.4% on tax-saving FDs; IndusInd Bank offers an interest rate of 7.25% on tax-saving FDs; RBL Bank offers an interest rate of 7.1% on tax-saving FDs; HDFC Bank, ICICI Bank, and Axis Bank offer a 7% interest rate on tax-saving fixed deposits; IDFC First Bank also offers an interest rate of 7% on tax-saving FDs; SBI and PNB offers an interest rate of 6.50% and Canara Bank offers 6.70% for tax saving FD for general citizens.