Cosmos Bank Tax Saving Fixed Deposit

Tax-saving fixed deposits (FDs) is a prominent instrument for those looking to blend the safety of traditional savings with the benefits of tax deductions. Cosmos Co-operative Bank, with its rich history and extensive reach in Western India, offers a Tax Saver Deposit Scheme that not only provides investors with a secure and reliable interest return but also allows them to avail of a tax deduction of up to ₹1.5 lakhs under Section 80C of the Income Tax Act of 1961.

Investing in Cosmos Bank's tax-saving FD means balancing garnering good returns and effectively reducing your taxable income.

• The interest earned on all types of FDs is included in the total income and is taxable per the prevailing slab rate. 
• As per section 80C of the Income-tax Act 1961, the investor gets an exemption of ₹1,50,000 in tax saver FD investment.
• For a senior citizen (Aged above 60 years), a deduction of up to ₹50,000 is available; for non-senior citizens, up to ₹40,000.
• If the PAN is not provided, then, in that case, 20% TDS is levied.
• In case your total income is below the taxable limit, i.e. Rs. 2.5 lakhs, you can avoid TDS by submitting Form 15G to the bank.
• For senior citizens, if your total income is below the taxable limit, you can avoid TDS by submitting Form 15H to the bank.

Now let’s take a look at the features a little bit in-depth:

Duration: Tax Saving FDs usually come with a 5-year lock-in period, prohibiting any withdrawals during this time.

Interest Offerings: Competitive interest rates are a highlight, and institutions like Federal Bank often provide an additional rate increment for senior citizens.

Borrowing against FD: Given their fixed tenure, these FDs typically can't be used as loan collateral.

Interest Disbursement: Different payout options, such as monthly, quarterly, or annual intervals, might be available. Some banks also provide reinvestment of the earned interest.

Renewal Policy: Unless instructed otherwise, these FDs can be automatically renewed upon maturity for an equivalent period at the current interest rate.

Early Withdrawal Charges: Withdrawals before the end of the lock-in period aren't permissible. Withdrawing after the lock-in but before FD maturity might invite penalties.

Investment Limits: While there's a minimum deposit requirement to start a tax-saving FD, the upper limit typically remains INR 1.5 lakh annually, aligning with the 80C guidelines.

Tax Deduction at Source (TDS): TDS might be deducted if the interest income surpasses a specified limit.

• Resident Individuals: Any individual who is a resident of India can open a Tax-saving FD with Cosmos Co-operative Bank.
• Hindu Undivided Families (HUF): The Karta of the HUF can open a Tax-saving FD on behalf of the family.
• Minors: Minors can open an FD through a guardian.
• Single or Joint Accounts: Both single and joint accounts can be opened. However, the tax benefit under section 80C is usually available only to the first account holder for joint accounts.
• Existing Cosmos Co-operative Bank Customers: Existing customers may find it easier to open a Tax-saving FD, especially online, given that their KYC details are already available with the bank. New customers might need to go through the full KYC process.
• Amount: The minimum amount for investment typically starts from a small amount (e.g., ₹100) but can go up to a maximum of ₹1.5 lakhs in a financial year to avail of the 80C benefit.

If you are not a prior customer or account holder in Cosmos Co-operative Bank, here are some documents you must submit.

For Identity Proof and Signature Proof

• PAN Card
• Driving License
• Passport
• Voter’s ID
• Aadhar Card

For Address proof

• PAN Card
• Driving License
• Passport
• Voter’s ID
• Aadhar Card
• Utility Bill
• Bank account Passbook (Updated and should not be more than 3 months old)