Fixed Deposit are one of the most convenient, safest and flexible investment options that allow one to choose the tenure and interest payout interval. The catch here is- interest earned on an FD that exceeds Rs 10,000 in a financial year is tax deductible.

Here are a few ways to help save your Fixed Deposit earnings from tax deductions:


Investing in Separate Fixed Deposit Accounts


Taxes are chargeable when you invest a lump sum in an FD- you should divide your funds into smaller amounts and invest in separate FD accounts. Doing so will maximize returns and reduce your tax burden.

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Timing it Smartly


Timing your FD investment so that the interest does not exceed Rs 10,000 in a financial year helps you evade taxes. Use an online FD calculator to check how much your investment will earn you in a financial year- if the value exceeds Rs 10,000, start your FD account mid year so that the interest earned gets splits into two parts.


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Submission of Form 15G/15H


By submitting a Form 15G (for individuals below 60 years) and Form 15H (for senior citizens), you declare that you do not have a taxable income, thereby saving you taxes.