IOB Tax Saver Scheme
Indian Overseas Bank (IOB) offers a Tax Saver Scheme that is a fixed deposit with a lock-in period of five years that provides tax benefits under Section 80C of the Income Tax Act along with competitive interest rates.
Senior citizens can obtain additional interest rates that are 0.50% more than that offered to the general public.
Eligibility Criteria for Indian Overseas Bank Tax Saving Scheme
The main eligibility criteria for this product includes:
- This deposit scheme is open to individuals.
- The Karta of a Hindu Undivided Family (HUF) can open in his capacity as Karta (as the leader of the family).
- The deposit can be in the single name of the depositor or in joint names of two adults or jointly in the name of an adult with a minor (only two joint account holders are permitted) payable to either or survivor.
Features of Indian Overseas Bank Tax Saving Scheme
Account Type | Single and joint both permissible |
Amount | Min: Rs. 10,000 Max: Rs. 1,50,000 is accepted under the scheme from one individual / under one deposit account in year (Year means one year from 1st April to 31st March). |
Rate of Interest (effective 10 December 2022) | General public: 6.50% p.a. Senior Citizen deposits: 7.00% p.a. |
Period | Minimum: 5 years Maximum: 10 years |
TDS | The single depositor or the first holder of joint deposit can claim exemption from Income Tax under section 80C for amount invested in the deposit along with all other approved investments under section 80C with a maximum of Rs.1.5 lakh. |
Loan against IOB Tax Saving Scheme | Loan cannot be granted against the deposit nor can the deposit be accepted as collateral security. |
Nomination (if any) | Nomination can be made for the deposits as per the existing rules for nomination. No nomination, however, can be accepted in the case of deposits held for and held by or on behalf of a minor as per the rules of the scheme. |
Repayment of Deposit | Deposit is repayable on or after maturity date in the normal course. Premature closure is not permitted till the deposit completes 5 years from date of deposit. |
*Interest rates are linked to the bank’s base rate and are subject to change as per the bank’s discretion.
FAQs on Indian Overseas Bank Tax Saving Scheme
- What happens in the case of Death of a depositor?
In such as case the nominee is entitled to claim the deposit amount, but before or after the maturity date. The claim from the nominee is to be settled based on the current guidelines in force for settlement of claim on death of depositors. In cases of deposits where the depositor has not stated any nomination, the deposit amount can be settled with the legal heirs.
- What are the types of deposits accepted for this scheme?
Types of deposit that can be accepted include
- Reinvestment deposit (RDP)
- Fixed Deposit
- Special Fixed Deposit (SFD) and interest may be payable half-yearly or quarterly or monthly.
- What are the special conditions to issue a deposit receipt?
The PAN number of the depositor as well as his signature will be displayed on the deposit receipt.
- How does one replace a lost or destroyed deposit receipt?
In such a case a duplicate receipt can be issued by simply furnishing an indemnity.
- Can the deposits be transferred between branches or banks?
While transfer of deposit between branches of IOB is permitted, transfer between banks is not permitted. Branches, therefore, should not accept deposits transferred from another bank.
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