Each year individuals look for ways to save tax on their income, whenever they are filing their tax returns. With so many tax-saving investment tools available in the market, individuals must choose a scheme wisely which offers them the best savings.
One such scheme is offered by the country’s top public lender, State Bank of India – the SBI Tax Savings Scheme, 2006. The minimum tenure of the plan is for 5 years which can go up to a maximum of 10 years.
Under this scheme, the investor is required to make a minimum deposit of Rs 1,000 or multiples thereof. The maximum deposit should not exceed Rs 1,50,000 in a year.
Interest rate offered by SBI Tax Savings Scheme
The rate of interest for the SBI Tax Savings Scheme, 2006, is just like that of fixed deposits. As per the latest rates, effective from February 15, SBI FDs maturing between 5 years to 10 years will yield 5.5 per cent to general customers.
SBI Tax Savings Scheme withdrawal and nomination rules
Since the minimum tenure of the plan is 5 years, the account cannot be withdrawn before that. The scheme also provides a nomination facility to depositors.
Benefits of the scheme
Tax benefits under section 80C of Income Tax Act, 1961.
TDS is applicable at a prevalent rate.
Form 15G/15H can be submitted by the depositor to get exemption from Tax deduction as per Income Tax Rules.
Who is eligible for SBI Tax Savings Scheme?
Any resident Indian can open the account for himself/herself as an individual or in the capacity of the Karta of the Hindu undivided family. They must have a valid Permanent Account Number (PAN).
The joint account shall be issued jointly to two adults or to an adult and a minor.
Under this scheme, the investor is required to make a minimum deposit of Rs 1,000 or multiples thereof. The maximum deposit should not exceed Rs 1,50,000 in a year.