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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
According to Bidul Agwaan, Vice President – Corporate Development and Institutional Relations, “Among the various types of FDs, Tax-saving FDs are particularly advantageous for reducing taxable income. These FDs come with a minimum lock-in period of 5 years and qualify for deductions under Section 80C of the Income Tax Act. Investors can claim deductions of up to ₹1.5 lakh per financial year, effectively lowering their taxable income.”
While the interest earned on these FDs is taxable, the principal deduction helps in reducing the overall tax liability, making them an attractive choice for tax-conscious investors, Agwaan says.
In terms of returns, FDs typically offer annual interest ranging from 5% to 7%. While this is a stable return, the interest earned is fully taxable according to the applicable income tax slab. For investors in the higher tax brackets, especially those in the 30% slab, the post-tax returns may be significantly lower.
Here are some other features of tax-saving FDs:
- The interest earned, as a part of the Tax Saving Fixed Deposit is taxable and is deducted at source
- Premature withdrawals, Loans or Overdraft (OD) facilities are not available for a Tax Saving FD. Regular Fixed Deposits offer Loan against deposits
- There is no auto-renewal facility for Tax Saving Fixed Deposits
- Interest payouts are flexible; you can opt for monthly or quarterly payouts or reinvest in principal
- Tax Saving FD interest rates remain unchanged over the five-year period
- Interest rates differ from bank to bank and rates for Indian citizens, Hindu Undivided Family (HUF) also vary
- Tax Saving FDs can be held in a single or a joint mode. If it’s a joint Tax Saving Fixed Deposit, tax benefits are available only to the first account holder.
Suresh Darak, Founder of Bondbazaar, says, “There are both tax-free and tax-saving Fixed-Income instruments available for investors. Public sector companies like REC and NTPC also issue tax-free bonds, while tax-saving bonds like 54EC can be used to save taxes on long-term capital gains from equities or real estate.”
Also Read : What is the maximum contribution limit for PPF accounts?
First Published: Dec 24, 2024 6:35 PM IST
