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Fixed Deposits (FDs) are a popular investment choice among Indian investors. FDs offer a guaranteed rate of return and are considered to be a safe investment avenue. In this article, we will explore the FD rates for 2024 and the tax implications associated with FD investments.
FD Rates 2024:
Fixed Deposit rates are subject to market fluctuations and are influenced by various factors such as inflation, repo rates, and the Reserve Bank of India’s monetary policies. It is important to keep a tab on the FD rates as they are crucial in determining the returns on your FD investments.
The current FD rates offered by some of the top banks in India are as follows:
HDFC Bank: For deposits up to INR 2 crore, the interest rate ranges between 2.50% and 5.50% for a tenure of 7 days to 10 years.
State Bank of India: For deposits up to INR 2 crore, the interest rate ranges between 2.90% and 5.40% for a tenure of 7 days to 10 years.
ICICI Bank: For deposits up to INR 2 crore, the interest rate ranges between 2.50% and 5.50% for a tenure of 7 days to 10 years.
Axis Bank: For deposits up to INR 2 crore, the interest rate ranges between 2.50% and 5.50% for a tenure of 7 days to 10 years.
Kotak Bank: For deposits up to INR 2 crore, the interest rate ranges between 2.50% and 5.60% for a tenure of 7 days to 10 years.
It is important to note that these rates are subject to change and investors should keep an eye on the latest FD rates before investing.
Tax Implications:
Fixed Deposits are subject to taxation under the Income Tax Act, of 1961. The interest earned on FD investments is considered income and is taxable at the applicable tax rate. The following are the tax implications associated with FD investments:
1. Tax Deducted at Source (TDS):
Banks are required to deduct TDS at the rate of 10% on the interest earned on FD investments if the interest amount exceeds INR 40,000 in a financial year. If the investor has not provided his/her PAN details, then the TDS rate increases to 20%.
2. Tax Treatment of Interest Income:
The interest earned on FD investments is considered as income and is added to the investor’s total income. The applicable rate of tax is based on the investor’s tax bracket. The tax rates for different tax brackets for the financial year 2021-22 are as follows:
For individuals with taxable income up to INR 2.5 lakhs, the tax rate is nil.
For individuals with taxable income between INR 2.5 lakhs and INR 5 lakhs, the tax rate is 5%.
For individuals with taxable income between INR 5 lakhs and INR 7.5 lakhs, the tax rate is 10%.
For individuals with taxable income between INR 7.5 lakhs and INR 10 lakhs, the tax rate is 15%.
For individuals with taxable income between INR 10 lakhs and INR 12.5 lakhs, the tax rate is 20%.
For individuals with taxable income between INR 12.5 lakhs and INR 15 lakhs, the tax rate is 25%
For individuals with taxable income above INR 15 lakhs, the tax rate is 30%.
3. Tax Saving FDs:
Banks offer Tax Saving FDs which come with a lock-in period of 5 years and offer tax benefits under Section 80C of the Income Tax Act. The maximum amount that can be invested in a Tax Saving FD is INR 1.5 lakhs in a financial year. The interest earned on Tax Saving FDs is taxable at the applicable rate of tax.
Disclaimer:
Investing in the Indian financial market involves risk and investors must gauge all the pros and cons before making any investment decision. The FD rates mentioned in this article are subject to change and investors are advised to research the latest FD rates before making any investment decision.
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Summary:
Fixed Deposit rates are subject to market fluctuations and are influenced by various factors such as inflation, repo rates, and the Reserve Bank of India’s monetary policies.
The current FD rates offered by some of the top banks in India range between 2.50% and 5.60% for a tenure of 7 days to 10 years. Fixed Deposits are subject to taxation under the Income Tax Act, of 1961. The interest earned on FD investments is considered income and is taxable at the applicable tax rate. It is important to keep a tab on the latest FD rates and tax implications before making any investment decision.
