State Bank of India Tax Saving FD Scheme

State Bank of India Tax Saving FD Scheme

The State Bank of India or SBI Tax Saving FD scheme allows an investor to enjoy tax benefits under Section 80C of the Income Tax Act, 1961. Depositors warn an attractive interest rate on lump-sum deposits of up to INR.1.5 lakh while also benefiting from tax deductions of up to INR1.5 lakh including other exemptions in this category as per the Income Tax Act, under the SBI Tax Saving FD scheme. Senior citizens can earn an extra 0.50% on their fixed deposit. Because of the tax benefits, there is a five-year lock-in period for this. This SBI scheme was introduced in 2006 and allows tax breaks on investments.

This guide will help you become well-versed in the SBI Tax Saving Fixed Deposit.

Eligibility Criteria

The SBI Tax Saving Fixed Deposit does not restrict its customers from enjoying the tax benefits by setting up too many parameters. Having the knowledge of the eligibility criteria allows a depositor to make their investment plan.

• Must have an account with the bank
• Must be a resident of India
• The minimum age requirement is 18 years
• In order to qualify for the scheme, the applicant must be ready with all KYC-related documents and any other document that the bank may require
• A valid Permanent Account Number (PAN) must be provided
• A member of the Hindu Undivided Family (HUF) is eligible to apply

Documents Required

It is important for a depositor to be aware of the various documents required to begin with the SBI Tax Saving Fixed Deposit. The following documents must be carried by the applicant to the nearest SBI branch to confirm their identity:

• Application form of the State Bank of India
• Aadhaar card details
• PAN card
• Documents supporting proof of identity like Aadhaar card, passport, PAN card, driving license, etc
• Documents supporting proof of address like Aadhaar card, utility bills, water bills, driving license, voter ID card, etc
• Form 60 or Form 61
• Two passport-size photographs

Key Attractions

The SBI Tax Saving FD scheme offers consumers a fair opportunity to gradually increase their financial capital while also being a handy and risk-free financial product to invest in. The investment plan is related to tax advantages. In addition, some features that make this scheme a profitable choice for clients are discussed below.

• Customers can expect returns. Wealth will increase in accordance with the applied interest rate during the 5-year lock-in term.
• Customers can claim returns when filing income tax returns, even though tax deductions are available on interest earned.
• Customers receive up to INR 1,50,000 in tax refunds.
• In the event that the account holder has an accident, there are provisions to apply for a nomination facility.
• With a minimal minimum deposit requirement, clients can contribute what they can.
• The SBI Tax Saving Fixed Deposit programme offers senior citizens better rates.

Features & Benefits

The unique features and benefits of the SBI Tax Saving Fixed Deposit provide the scheme with a certain charm and allure the customers. Following are a few notable benefits and features of the convenient and risk-free fixed deposit scheme offered by the State Bank of India:

• Tax benefits up to INR 1.5 lakhs are offered as per Section 80C of the Indian Income Tax Act, 1961.
• The State Bank of India offers two types of accounts, namely, Term-Deposit accounts (TD) and Special Term Deposit accounts (STD).
• The lock-in period is of 5 years.
• The maximum tenure of the deposit is 10 years.
• The facility to open an SBI Tax Saving Fixed Deposit account is available in all bank branches.
• One can begin their investment journey by making an initial deposit of INR 1,000 and later, in the multiples of INR 100.
• Senior citizens (aged 60 or above) are required to make an initial deposit of INR 10,000 and continue the deposits in the multiples of INR 100.
• Since it is a tax-saving fixed deposit scheme, the deposits cannot exceed INR 1.5 lakhs otherwise the interest earned will not be qualified for tax benefits under Section 80C.
• The rate of interest remains the same as term deposits for both senior citizens and the general public.
• Individuals can make nominations at the time of filling out the application form.
• One cannot take a loan against the fixed deposit amount during the lock-in period.
• The SBI Tax Saving Fixed Deposit can be transferred from one SBI branch to another.
• One can not make a withdrawal or encash their fixed deposit amount during the lock-in period. However, in the event of the depositor’s untimely death, encashing or withdrawal can be made.
• Tax Deducted on Source (TDS) is applicable on interest earned at a prevalent rate. If a depositor wishes to be exempted from tax deductions as per the Income Tax rules, they need to submit Form 15H/15G.
• Interest payments will be made as per the norms of special term deposits and term deposit accounts..
• The fixed deposit account can be operated online.
• The bank provides an option to its customers to choose a nominee at the time of opening the FD account.

How to Apply for the State Bank of India Tax Saving FD

The State Bank of India understands the requirement of individuals to invest in a fixed deposit scheme. One can apply for the SBI Tax Saving FD scheme from the comfort of their home. The following steps will need to be followed:

• Log into your account with SBI.
• On the homepage, locate the ‘e-fixed deposit’ option at the top of the menu.
• The next page will feature all the FD options available.Choose the ‘e-TDR/e-STDR under Income Tax Saving Scheme’ option and then click on the ‘Proceed’ button.
• The next step is to select the account from which the payment will be made as the initial deposit. If you wish to avail the senior citizen option, click on the ‘Senior Citizen’
• Choose between a cumulative (STDR) or non-cumulative (TDR) fixed deposit in the next step. Select the tenure, specify the maturity level, agree to the terms, and press “Submit”.
• The next screen will display a message confirming your fixed deposit account.

Download the State Bank of India Tax Saving FD Application Form

One can download the form from the official website of the State Bank of India. Follow the below-mentioned steps to know how to do the same:

• Visit the official website of the State Bank of India
• At the bottom of the homepage, locate ‘Home’, and click on the ‘Download Forms’ option
• Click on the form you wish to download