NRO–5 year tax saver Fixed Deposit is eligible for tax benefit under Section 80C of Income Tax Act, 1961. This provides an opportunity to diversify investments in addition to other investments permitted in Section 80C.
As per section 115D of the Income Tax Act, the benefit under Section 80C is available to Tax Saver deposit only if the income earned is other than investment income (interest) and long term capital gains. Key features of NRO Tax Saver are:
- Minimum Amount: Rs.10000/-
- Multiples of Rs.100/-
- Maximum Amount: Rs. 1.5 lakhs(in a FY)
- Tenure-5 years (lock in period) and Maximum 10 years
- Monthly or quarterly interest pay-out option is available
- No partial/premature withdrawal allowed
- Sweep-in not allowed
- No OD or pledge allowed
- Fixed Deposit can be opened in single or joint name but the tax benefit can be claimed only by the first account holder