Fixed Deposits 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.


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.

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.