On investing in Bank FD and RD, a maximum exemption of Rs 50,000 is available under Section 80TTB of Income Tax.
Income Tax: Tax exemption is given by the government on depositing money in bank FD, RD, bond and savings account. Any person can claim income tax exemption up to a limit on the interest received from such investments. It is different for senior citizens and ordinary citizens.
How much tax exemption is available on investment in bank FD and RD?
You can avail tax exemption on interest received on bank FD and RD only in the old tax regime. This benefit is not available in the new tax regime. An ordinary person can claim exemption under Section 80TTA of Income Tax on the total interest received on all savings accounts in a financial year up to Rs 10,000. Ordinary citizens do not get any tax exemption on interest received in RD and bank FD.
Let us tell you, post office schemes are not included in this. All investors on small saving schemes like NSC, Sukanya Samriddhi Yojana get the benefit of tax exemption under Section 80C of Income Tax.
Senior citizens get a discount of up to Rs 50,000
Any senior citizen can claim tax exemption under Section 80TTB of Income Tax on interest earned on savings account, bank FD and RD up to Rs 50,000 in a financial year.
How much tax exemption is available on bonds and corporate FDs?
If an investor earns interest by investing money in bonds, corporate FDs and debentures, then he is not given any kind of tax exemption in income tax.
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