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What is an Axis Bank Tax Saver FD?

Axis Bank Tax Saver FD is a type of fixed deposit that combines the advantages of an FD with tax benefits. You can save income tax by investing in an Axis Bank Tax Saver FD under section 80C of the Income Tax Act, 1961. A tax deduction of Rs 1.5 lakhs is available under Section 80C for an investment in a tax-saving fixed deposit. Unlike other fixed deposits, the Axis Bank Tax Saver FD includes a 5-year lock-in period. As a result, before investing in a tax-saving FD, an investor must examine the investment’s liquidity. If an investor is looking for a tax saver investment option with assured returns then a tax saver Fd is a better option. This is because except ELSS other tax saver investment options like PPF, NSC, etc have a higher lock-in period.

Axis Bank Tax Saver FD Interest Rate 2022

Type of InvestorDeposits Below RS. 2 CroreDeposits Of Rs. 2 Crore < RS.4.91 CroresDeposits Of Rs. 4.91 Crore < Rs.4.92 CroresDeposits Of Rs. 4.92 Crore < Rs.5 Crores
Individual (Less than 60 years of age)5.75%4.65%3%4.65%
Senior Citizen6.50%5.40%3.75%5.40%

Features of Axis Tax Saving FD

  • The minimum amount for the tax saving FD is Rs. 100 & in multiples of Rs. 100
  • Maximum amount allowed for a financial year is Rs. 1.5 Lakhs
  • The lock-in period is 5 Years from the date of deposit
  • The tax saver fixed deposit cannot be withdrawn even after paying a penalty. 
  • You can opt for a quarterly compounding or reinvestment of interest earned. Alternatively, you can opt for a monthly payout of interest. However, by reinvesting the interest you will benefit from the power of compounding leading to a higher maturity value.
  • You can book the tax saver FD either in your own name or hold it jointly with another individual. 
  • In the case of a single account, the FD receipt will be provided to the individual. If the account holder is a HUF then the receipt will be in the name of the Karta of the HUF.
  • The joint account type receipt will be given to both the individual or the adult individual and a minor. Moreover, the maturity amount will be paid to either of the account holders or the survivor.
  • In the case of a joint FD, the income tax benefit will be available to the primary account holder. However, for this the primary account holder must possesses their PAN. 
  • TDS tax deducted at source on interest will be deducted after the end of every calendar quarter
  • In case of loss, theft, destruction, mutilation or defacement of the FD receipt, a duplicate receipt will be issued only on furnishing an Indemnity bond in the prescribed form with one or more approved sureties or with a bank guarantee.

Who can Invest in the Axis Bank Tax Saver FD?

The eligibility rule for investing in a tax saver fixed deposit is the same across all the banks in India. An individual resident of India as well as a HUF Hindu Undivided family can invest in the tax saver fixed deposit.

How to Invest in Axis Bank Tax Saver FD?

Online Mode

It’s easy to apply for Axis Bank’s Tax Saver Fixed Deposit online. You can apply from the convenience of your own home or from your business desk. Here’s how to apply for a Tax Saving Fixed Deposit using internet banking with the following easy steps.

  • Login to Internet Banking and select the deposit option. To login, click here For login Internet Banking
  • Click on Create Recurring Fixed Deposit
  • Fill in the required account and nominee details as instructed on the screen.
  • On confirmation, the selected amount will be debited from your savings account. The tax saver fixed deposit will be created instantly. The bank will instantly issue the FD receipt. You will receive the receipt of the Tax Saver Fixed Deposit booked on your registered email address. The value date for opening of the deposit and the rate applicable will be as per the date of request i.e. the day on which the savings account is debited.
  • If you are registered for e-statement then a physical advice will be dispatched to your registered communication address. You will be able to also view the Tax Saver Fixed Deposit advice in Internet Banking after one working day of deposit booking.

Offline Channel

Alternatively you can book a fixed deposit by visiting the nearest bank branch. You will have to fill the application form and submit along with the documents. These documents include your PAN and address proof such as Aadhaar. It is advisable to book the FD online through internet banking. It is much easier and time saving to make a transaction online rather than visiting the branch.

Tax on Axis Bank Tax Saver FD

  • The investor can claim a tax benefit of up to Rs 1.5 lakhs under section 80C of the Income Tax Act, 1961.
  • The interest earned is chargeable to tax under the head income from other sources
  • The interest income is added to the gross total income for the financial year. The tax deduction is deducted from the gross total income. The net taxable income is taxed at the applicable slab rate for the financial year. 
  • TDS will be deducted at the time of payment of the interest income or credit of the income. The TDS is deducted under section 194A of the Income Tax Act, 1961.
  • TDS is deducted when the total amount of interest due or reinvested on FDs and RDs per customer across all branches exceeds Rs 40,000. This is Rs. 50,000 for senior citizens in a financial year.
  • TDS certificate is issued by the bank every quarter to the depositor. The TDS certificate will contain the details of TDS deducted and the interest income. 
  • If you have not received the TDS certificate, you can check the details of TDS deducted through Form 26AS. You can download the Form 26AS by logging on to your income tax account. 
  • It is mandatory to quote PAN for the depositor. A failure to do so will lead to a TDS deduction at a higher rate of 20%. Even if the PAN quoted with the bank is wrong it will be treated as no PAN provided. 

Lower or NIL Deduction of TDS

  • TDS will not be deducted from taxable interest in the case of an individual living in India who produces the appropriate Bank Form 15G / Form 15H. The tax on the expected total income for the financial year must be Nil. However, the individual must provide Axis bank with his or her PAN.
  • Investors must send three copies of Form 15G or Form 15H to the bank. One copy will be sent to the Income Tax Department. The second copy will be kept on file at the bank. The third will be provided to the buyer along with a Branch seal as proof of receipt.
  • The investor must file a new Form 15G or Form H for each new financial year. If form 15G or Form 15H is submitted after the interest payout/credit, the waiver will take effect the day after the interest payout/credit immediately preceding the date of form 15G/H filing.
  • For each fixed deposit with the bank, Form 15G or Form 15H must be supplied for tax exemption.
  • The bank will not be held responsible for any consequences that come from failing to submit Form 15G or Form 15H on time or at all.

Frequently Asked Questions

What is a tax saver deposit in Axis Bank?

A tax saver deposit in Axis Bank is a fixed deposit that offers assured rate of interest along with income tax deduction. You can claim the tax deduction of up to Rs 1.5 lakhs under section 80C.

Is Axis Bank FD tax free?

Axis Bank FD is not tax-free. The interest income is taxable in the hands of the depositors under the head income from other sources. TDS is deducted from the interest income as per section 194A. However, Axis Bank Tax Saver FD is eligible for a tax deduction of up to Rs 1.5 lakhs under section 80C.

Can I break Axis Bank tax saver FD?

No, you cannot prematurely withdraw from the Axis Bank tax saver FD account. Unlike other fixed deposits, the tax saver FD has a mandatory lock-in period of 5 years.

What is the duration of Axis Bank tax saver FD?

The Axis Bank tax saver FD provides for a mandatory lock-in period of 5 years. 

Who can invest in the Axis Bank tax saver FD? 

An individual being a resident of India including a senior citizen and a Hindu Undivided Family HUF.

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