A good investment is extremely vital to offset the uncertainties thrown by the future. In a country like ours where the habit of savings is extremely stressed upon, it is easier to witness wide range of avenues for investment.

These days, the primary reason for making an investment is to save tax on the earnings. You might’ve come across your friends adopting this practice by investing on multiple avenues.  Be it mutual funds or real estate, as an investor you can come across an array of options.

But in reality, not all of them are as good as it seems on the paper. Yes, there is no doubt that all of them fetch handsome returns, but you have the danger of losing out a big sum at once if and when the economy is faced with a crisis. The vulnerability of the market has a bigger impact on the receivables.

That’s when you should hold onto a conventional option like fixed deposit. Fixed deposit under the pretext of earning you interest also keeps your investment safe and sound for the duration of period you would desire.

Additionally they have different payout options like monthly, quarterly, half-yearly and yearly, you can choose the one that suits your financial needs the most.

Tax Saving Term Deposit

Opt for a tax saving fixed deposit from a bank or NBFC, these type of deposits usually have a lock-in period of 5 years which will enable the habit of saving. According to section 80C of the Income Tax Act, the interest earned on the fixed deposits are taxable at the rate of 10.3%, but only if the interest amount exceeds Rs 10000 annually.

But there are certain other hacks designed by the experts over the years to smartly avoid TDS on the fixed deposits.

If you’re still wondering about the tax-saving ability of a fixed deposit, then we have listed different ways below that will suitably aid you in the process. Let us take a look at these.

• Submit Form 15G/15H: If you submit Form 15G stating that you have no other taxable income, then it becomes easy to avoid the tax radar. Also if you’re a senior citizen, look no further, submit a Form 15H and avoid TDS outright.
• Multiple Fixed Deposits: Iits portal that helps you calculate FD interest on the investment made. FD interest rate calculator in days is what you require to arrive at the right picture. In accordance with earlier statement—if you see the interest income exceeding Rs 10000—then you will have to open multiple FD accounts to avoid TDS. As an individual you can wisely one account under your name and if you belong to HUF, then the other account under its name would be the way to apportion the investment without affecting the returns in any manner.
• Timing of the Deposit: Another effective way of avoiding TDS on fixed deposit would be to time the deposits cleverly. Invest the sum in between a financial year so that the tenure falls under two consecutive years. This will ensure that the interest amount successfully escapes the Rs 10000 bracket effortlessly.

The process of getting your head around on the tax-saving investments can seem overwhelming,