Fixed Deposit is one of the simplest and most used Investment product in India. This article covers Fixed Deposits in Detail.
All about Fixed Deposit
For someone who does not want any kind of uncertainty with regard to his or her investments, Fixed Deposits is the right choice. But Banks have been reducing rates on Fixed Deposits
- The fixed deposit schemes offered by most banks can be availed for tenures ranging from as short as seven days to as long as 10 years. Few of the banks, such as the State Bank of Patiala, IDBI Bank, the Ratnakar Bank, etc. offer FDs that stretch to 20 years as well.
- The interest on FDs is compounded on a quarterly basis.
- Periodic Payouts , monthly or quarterly, are available.
- Most of the banks offer from 0.25% to 0.50% extra to senior citizens.
- Banks offer a higher interest for deposits of Rs. 1 crore and above. These deposits are called Bulk Deposits.
- Banks offer Loan/Overdraft against the amount available in Fixed Deposit. The interest is generally 0.5% to 1% more than that offered to FD.
- TDS (Tax deduction at source) at the rate of 10% is deducted if the interest income is more than Rs 10,000 in financial year per bank
- There might be penalty for pre-mature withdrawal of Fixed Deposits
Lets Learn about Fixed Deposit Rates
- Best Fixed Deposit Interest Rates
- What is Fixed Deposit
- Fixed Deposit and Interest Rates
- Fixed Deposits ,Tax and TDS
Best Fixed Deposit Rates
Best Fixed Deposit Rates over different periods of time are given below. Increased liquidity on the back of the rise in cash deposits by customers, due to the government’s demonetisation move.and Experts expect RBI to cut key rates. Interest rates of FDs could be headed further downwards. Our article covers Best Fixed Deposit Interest Rates, FD rates and FD interest of the major Banks like SBI, State Bank of India for period of 7 days-10 years giving FD interest rate of 5.25% p.a.-7.00% p.a.
|Period of the FD||Bank and Interest Rate|
|Less than a year||
What is Fixed Deposit?
Fixed Deposits are bank deposits for a fixed or specified period chosen by investor or depositor at a fixed rate of interest. You can deposit money for as short a period as 7 days and upto 10 years. When you open a fixed deposit with the bank then you are lending money to the bank and it pays you interest. As interest rate and time period are fixed this investment product is called as Fixed Deposit. Deposit up to Rs 1 lakh in any bank is protected under the Deposit Insurance & Credit Guarantee Scheme of India
Each bank or financial institution that is offering fixed deposits fixes its own deposit rates. Interest rates are subject to change from time to time. Interest of FD varies based on the time period, the amount which is deposited. Most of the banks offer higher interest rate(0.5% more) to Senior Citizens.
Our article Overview of Fixed Deposits covers fixed deposit in detail.
Fixed Deposit and Interest Rates
Employee Provident Fund is a retirement benefit applicable only to salaried employees of private organizations. Government Employees do not contribute to EPF but to NPS from 2004. It is a fund to which both the employee and employer contribute 12% of the basic salary each month. This page has articles and link to articles covering EPF, EPS in Detail. You will come to know What is EPF, What is EPS, What is EPF Private Trust, How much pension will one get under EPS, VPF,
When one says EPF it means
- Employee Provident Fund (EPF) : Employee’s contribution is matched by Employer’s contribution(till 12%). The employer contribution is exempt from tax and employee’s contribution is taxable but eligible for deduction under section 80C of Income tax Act. The EPF amount earns interest as declared by Government.
- Employees’ Pension Scheme (EPS) of 1995 offers pension on disablement, widow pension, and pension for nominees.
- Employees Deposit Linked Insurance Scheme (EDLIS) provides for a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident, while in job.
UAN is Universal Account Number is a 12-digit number allotted to employee who is contributing to EPF. Universal number is a big step towards shifting the EPF services to online platform and making it more user-friendly. Please note that The universal account number remains same through the lifetime of an employee. It does not change with the change in jobs. Now one has UAN number and PF number also called as Member Id. Our article All About UAN or Universal Account Number of EPF discusses UAN in detail.
All About EPF, EPS, EDLIS
This page has articles and link to articles covering EPF, EPS in Detail.
- Basics of Employee Provident Fund
- Understanding EPS or Employee Pension Scheme
- Employees Deposit Linked Insurance Scheme (EDLIS)
- EPF Private Trust
- How much pension will one get under EPS
- Voluntary Provident Fund
- Withdrawal or Transfer of EPF
- How to Transfer EPF
- How EPFO earns to pay Interest
Basics of Employee Provident Fund
Employee Provident Fund (EPF) is implemented by the Employees Provident Fund Organisation (EPFO) of India. It is one of the largest social security organisations in the world in terms of members and volume of financial transactions undertaken. An establishment with 20 or more workers working in any one of the 180+ industries ( given here) should register with EPFO. EPFO is a statutory body of the Indian Government under Labour and Employment Ministry
UAN is Universal Account Number. The UAN is a 12-digit number allotted to the employee who is contributing to Employee Provident Fund or EPF. UAN number is a big step towards shifting the EPF services to online platform and making it more user-friendly. Please note that the universal account number remains same through the lifetime of an employee. It does not change with the change in jobs. In this page you will get all information about UAN.
All About UAN
- Advantages of UAN
- How is UAN number alloted?
- Verify your UAN number
- Registration of UAN by the Employee
- New UAN Website for Employees
- UAN on Change of Job
- UAN Problem: Forgotten my Password, Mobile number changed
- UAN Problems and UAN HelpDesk
Advantages of UAN
Once you have the UAN number and you register it then you can check many details. Benefit Of Registration of UAN at UAN Member e-Sewa Portal are as follows:
- You can download the updated EPF passbook. The passbook will tell you the EPF balance broken into Employee Contribution(EE) and Employer Contribution (ER). Also deduction fro Employee Pension Scheme (EPS). Sample passbook is shown below.
- You can link your previous PF accounts (before Oct 2014) which are not linked to UAN number.
- You can upload KYC data.
- You can change mobile no and email address.
- In Future You can apply for the online PF transfer through UAN itself. Currently, it’s a separate process done through Online Transfer Claim Portal (OTCP). Going forward plans are that when employee changes job and new Member ID is allotted then transfer of old Member Ids would be done automatically.
Allotment of UAN for a new employee
In India, personal income tax is based on the concept of “pay as you earn” wherein there is a mandatory deduction of tax at source(TDS) from the salary paid to each employee. From Jan employer asks for tax saving Proofs. This article talks about the steps to claim tax benefits on Home Loan Interest, Why Submit the Tax Saving Proofs to your Employer on time, PAN number of the bank or institution from where you have taken loan, Provisional home loan interest certificate.
Steps to claim Interest on Home Loan Deduction
- An employee can claim home loan interest deduction under section 24C by submitting details to his employer in Form 12BB with proofs such as Ownership details of the property, provisional home loan certificate. you submit your interest on home loan deduction documents to your employer, your employer will adjust your TDS deductions accordingly.
- If you are a Freelancer or you are self-employed – you don’t need to submit these documents anywhere. You use it to estimate your Advance Tax liability for each quarter. You can claim it while filing ITR.
- An employee can also claim the tax deduction on the principal amount under section 80C by submitting details to the employer in Form 12BB along with other tax savings proofs such as PPF, Life Insurance Premium.
- Form 16 will show the tax saving proofs considered by the employer.
- Show Home loan interest as income from House Property while filing ITR. You are not required to submit these documents to the Income Tax Department.
If you don’t submit the proof to your employer, you can claim the Principal and Interest on Home loan while filing ITR and ask for the refund. But that’s delaying the process by at least 6 months. We recommend you to provide the tax saving proofs on time to your employer as stitch in time saves nine and taxes too1
To claim tax exemption on home loan one is required to quote PAN number of the bank or institution from where the loan was taken. The loan providers have now modified their home loan payment certificate which quotes their PAN Number. PAN numbers of some of the popular home loan providers are given below. The entire list banks and NBFCs with their PAN Numbers are here.
- SBI PAN Number – AAACS8577K
- HDFC PAN Number – AAACH0997E
- ICICI Bank PAN – AAACI1195H
Why Submit the Tax Saving Proofs to your Employer
In India, personal income tax is based on the concept of “pay as you earn” wherein there is a mandatory deduction of tax at source(TDS) from the salary paid to each employee. The taxes deducted at source (TDS) are covered under Section 192 of the Income-tax Act, 1961 making it the obligation of the employer to withhold taxes at the time of payment of salaries.
The employer asks for the declaration of tax saving proofs in the beginning of financial year i.e Apr. Since the beginning of the financial year, from 1 Apr, your employer would have been computing taxes on your salary based on the proposed investment declaration submitted by you earlier and deducting Tax.
Usually, from Jan employer asks you to furnish the documentary evidence of having actually made the investments as per the investment declaration made earlier. Once the actual proof is submitted, the accounts department will compute the taxes based on the proofs of the actual investments made by you.You can make tax-saving investments different from those declared by you earlier but the deduction from taxable income will be given only on the basis of the actuals submitted and not on the basis of the proposed declaration made earlier. This will also enable the employee to finalize tax adjustments, if any, in the balance months of the current financial year (2016-17).If taxes have been deducted in excess or less, accordingly, they will get deducted in the last 3 months of the FY. The documents need not be attached or sent to Income-tax Department at the time of tax filing. Instead, it’s the employer who has to receive them from employees and deduct tax accordingly. Our article Income Tax Proof Submission to the Employer discusses tax saving investment/expenditure proofs in detail.
Do not wait till March for saving tax as one could see a huge tax burden in that month and less of take-home pay.
Income Tax Benefits on a Home Loan
Income Tax Benefits on a Home Loan for FY 2016-17 are given in table below
|Interest on home loan
Interest on home loan
|Home has been purchased/constructed within 5 years|
|Section 80C||Principal repayment, stamp duty & registration charges||Upto Rs.1,50,000||Deduction is allowed in the year in which actual principal payment is paid|
|Section 80EE||Interest on home loan||Upto Rs.50,000 ( in addition to Rs 2lakhs)||Loan must be taken between 1st April 2016 to 31st March 2017
Taxpayer should not own any property
Loan from a financial institution
Value of the house must be less than Rs 50 lakhs
Loan must be for less than Rs 35 lakhs.
Documents to claim Income Tax Benefits on a Home Loan
Following documents need to be submitted for claiming the Income Tax benefits on Home loan in form 12BB. Our article Form 12BB for claiming Income Tax Deductions by Employees explaining Form 12BB in detail. Many employers have their own websites to upload the information.
- Provisional Interest certificate from Bank/Financial Institution specifying the break-up of interest and the principal amount. The certificate should also have the loan sanction date and PAN number
- Possession Certificate copy.
- Sale Deed Copy (In case possession letter in not available)
- Lease deed copy, in case of let out property
- In case of Joint Home Loan, self-declaration of the ownership proportion needs to be furnished
- Form 12C
PAN Number of the lender for Home Loan
To claim tax exemption on home loan one is required to quote PAN number of the bank or institution from where they have taken the loan. The loan providers have now modified their home loan payment certificate which quotes their PAN Number. But in case you are not able to find it, here is an alphabetic list of banks or finance institutions with their PAN Numbers.
If you want to check if the PAN Number of the lender is correct, you can do so at Income Tax website for PAN Verification.
PAN number of Banks and Financial Institutions
|Bank/Home Loan Providers||PAN Number|
|Axis Bank Limited||AAACU2414K|
|Bank of Baroda (BoB)||AAACB1534F|
|Bank of India (BoI)||AAACB0472C|
|Bank of Maharashtra (BoM)||AACCB0774B|
|BMW India Financial Services||AADCB8986G|
|Canfin Homes Limited||AAACC7241A|
|Central Bank of India||AAACC2498P|
|City Union Bank Limited||AAACC1287E|
|DCB Bank Limited||AAACD1461F|
|GIC Housing Finance Limited||AAACG2755R|
|HDFC Bank Limited||AAACH2702H|
|ICICI Bank Limited||AAACI1195H|
|IDBI Bank Limited||AABCI8842G|
|Indiabulls Housing Finance Limited||AABCI3612A|
|Indian Overseas Bank (IOB)||AAACI1223J|
|Indusind Bank Limited||AAACI1314G|
|Kotak Mahindra Bank Limited||AAACK4409J|
|L&T FinCorp Limited||AAACI4598Q|
|L&T Infrastructure Finance Company||AABCL2283L|
|LIC Housing Finance Limited||AAACL1799C|
|Oriental Bank of Commerce||AAACO0191M|
|PNB Housing Finance Limited||AAACP3682N|
|Power Finance Corporation Limited||AAACP1570H|
|Punjab & Sind Bank||AAACP1206G|
|Punjab National Bank (PNB)||AAACP0165G|
|State Bank of Bikaner and Jaipur (SBJJ)||AADCS4750R|
|State Bank of Hyderabad (SBH)||AADCS4009H|
|State Bank of India (SBI)||AAACS8577K|
|State Bank of Mysore (SBM)||AACCS0155P|
|State Bank of Patiala||AACCS0143D|
|TATA Motors Finance Limited||AACCT4644A|
|The Karnataka Bank Limited||AABCT5589K|
|The South Indian Bank Limited||AABCT0022F|
|Union Bank of India||AAACU0564G|
|United Bank of India||AAACU5624P|
|YES Bank Limited|
Provisional Home Loan Interest Certificate
The interest certificate from the bank or financial institution, specifying the break-up of interest and the principal amount for a financial year is required. A sample provisional home loan certificate showing break-up is given below.
Actual repayment is one that is the amount paid by the person who has taken the loan, from Start of the financial year(ie Apr) to the time of generating the certificate.
Expected repayment is amount one is expected to pay from the day of generation of the certificate to the Mar 31 i.e end of financial year
Most of the banks now provide the provisional home loan certificate through net banking. For example, if one has taken home loan from SBI one can view/download Interest Certificate (Provisional) of their home loan account(s) by following the steps given below. The certificate can be viewed online, printed or downloaded in pdf.
- Logging to Internet Banking site with your credentials
- Select Enquires Tab
- Select the “Home Loan Int.Cert (Prov)” link under “Enquiries” tab. Then select the account for which you require a Home Loan Interest Certificate.
India’s richest 1% or 57 billionaires, led by Mukesh Ambani, own $216 billion or 58% of the country’s wealth. Worldwide, 8 billionaires hold about 50% of global wealth, according to a study by non profit rights group Oxfam. This article talks about Oxfam report on Inequality in World, 8 Wealthiest Men in the World, and Richest People in India and how wealth is distributed in India.
Oxfam Report on InEquality in World and Davos
Just eight men own the same amount of wealth as the poorest half of the world, estimates a new paper from Oxfam, an international non-government organisation. Oxfam has an annual tradition of releasing a report to coincide with the World Economic Forum in Davos. The charity’s report suggests the wealth gap is wider than ever, with new data for China and India indicating that the poorest half of the world owns less than previously estimated. Oxfam bases its calculations on data from Forbes.
Davos is a small town in the Swiss Alps and is home of one of Switzerland’s biggest ski resorts. Every January Davos hosts the World Economic Forum (WEF) – a gathering of presidents, prime ministers, business leaders, economists, and celebrities.The conference’s official calendar is full of panel discussions and speeches, while off-schedule there will also be private meetings between politicians, business leader,s and senior bankers to discuss the key economic issues of the day.
More than 2,500 people will attend this year’s WEF from 90 different countries. The theme of 2017’s meeting is responsive and responsible leadership. This has been broken down into five key areas: strengthening global collaboration, restoring economic growth, reforming capitalism, addressing the identity crisis which has caused the current populist revolution and preparing for the Fourth Industrial Revolution. Donald Trump’s imminent presidency, Brexit and China are set to be key topics of discussion
Oxfam report on Inequality in World
The analysis, part of a series of papers written on humanitarian policy issues, attributes this “unsustainable and unjust“ global situation to the “design of our economies“ and calls for ending “excessive“ rewards for those at the top. Oxfammakes a strong case for tackling growing inequality, which, it says, will lead to social unrest and instability.
Oxfam, which described the gap as “obscene”. In 2010, by comparison, it took the combined assets of the 43 richest people to equal the wealth of the poorest 50 percent, according to the latest calculations. Oxfam called in its report for a crackdown on tax dodging and a shift away from “super-charged” shareholder capitalism that pays out disproportionately to the rich.
While many workers struggle with stagnating incomes, the wealth of the super-rich has increased by an average of 11 percent a year since 2009. It‟s time to build a human economy that benefits everyone, not just the privileged few
Inequality has moved up the agenda in recent years, with the head of the International Monetary Fund and the Pope among those warning of its corrosive effects, while resentment of elites has helped fuel an upsurge in populist politics.