What is Tax Saving FD ?

Tax saver fixed deposit (FD) is a type of fixed deposit, by investing in which, you can get tax deduction
under section 80C of the Indian Income Tax Act, 1961. Any investor can claim a deduction of a maximum
of Rs.1. 5 lakh by investing in tax saver fixed deposits.

 Lock-in period of 5 years

 Interest earned is taxable
 Rate of Interest ranges from 5.5% – 7.75%

ELSS
An Equity Linked Savings Scheme (ELSS) is an open-ended Equity Mutual Fund that doesn't just help
you save tax, but also gives you an opportunity to grow your money. It qualifies for tax exemptions
under section (u/s) 80C of the Indian Income Tax Act.

NSC
National Savings Certificate (NSC), Public Provident Fund (PPF) and Kisan Vikas Patra(KVP) are the most popular fixed
income earning instruments which can be opened with a Post Office and also help in saving tax under Section 80C.

The New Pension Scheme

The New Pension Scheme is a contribution based pension scheme in which any individual can contribute towards
their retirement fund.

Sukanya Samriddhi Account

Sukanya Samriddhi Account (Girl Child Prosperity Account) is a Government of India backed saving scheme targeted
at the parents of girl children. The scheme encourages parents to build a fund for the future education and marriage
expenses for their female child.

House Rent Allowance (HRA)

is an allowance paid by an employer to its employees for covering their house rent. Such allowance is taxable in the
hand of the employee. However, Income Tax Act provides a deduction of hra under section 10(13A) subject to
certain limits

LTA Exemption
is available for travel allowance given by the employer to the employee or his family. The exemption is claimed for
two journeys in a block of four years. Presently, the block of 2014-2017 is going on. Income Tax Department makes
these blocks.

Children Education Allowance:

If you are receiving children education allowance from your employer then you are eligible to claim a tax exemption
under the Income Tax Act. However, the maximum amount exempted is Rs. 100 per month or Rs. 1200 per annum
for maximum of up to 2 children
Gift voucher
The value of a gift, or voucher, or token provided by an employer, the aggregate value of which does not exceed Rs
5,000 annually, is tax-free in the hands of an employee.

Entertainment allowance
is fully taxable for all private sector employees. However, government employees are eligible for exemption if the
allowance is included in the gross salary

Professional tax
There are a few categories and people and categories that get benefit of tax exemption: Senior citizens are exempt
from professional tax. Parent of a mentally challenged child is exempt from this tax. Persons or parents of children
suffering from physical disability are exempt from paying professional tax.

The amount of professional tax collected does not exceed Rs.2500 per annum. Under Section 16(iii), a deduction
from salary can be claimed by the taxpayer on account of professional tax paid. The deduction for professional tax
will be allowed in the year in which the tax is actually paid by the employee