Fixed deposits offered by banks have been the favourite traditional saving and investment instrument for Indians. In the union budget of 2006, the long-term bank deposits were made liable for the tax benefit under section 80C of Income Tax Act, 1961.
It means investments up to Rs.1,00,000 in Bank FD at least for 5 years qualify for deduction from the gross total income for purpose of tax calculations.
On the backdrop of high interest rate last year, banks were flooded with deposits under this scheme. Now, it is a time to make tax planning for the financial year 2009-10 .
In view of this we bring out a ready reckoner on the tax savings deposit schemes offered by leading commercial banks.