Save Tax with Andhra Bank

Published On - March 15, 2016

admin Income Tax

Tax is a necessary evil, they say. Tax saving or reducing one’s tax liability is a key component of financial planning for salaried, retired and self-employed individuals. There are various tax saving instruments on offer.

Save Tax with Andhra Bank:

Andhra Bank offers a wide range of products and services. You can make the right investments by examining the tax benefits of each product and whether it fits into your specific financial requirements.

Under Section 80C:

Section 80C of the Income Tax Act encompasses a plethora of products. An individual/HUF can avail of a maximum deduction of up to Rs.1.5 lakh under Section 80C. The tax benefits received under various sections are listed below:

Andhra Bank Tax Saver Fixed Deposits:

Andhra Bank offers tax saver fixed deposits which have a maturity period of 5 years. The maximum amount which can be deposited under the account is Rs.1.5 lakh. Andhra Bank offers an interest rate of 7.75% for both tax saver and regular fixed deposits. Individuals and HUF can claim deduction up to Rs.1.5 lakhs under tax saver fixed deposits. It is important to note that the interest on tax saver deposits is taxable at the prevailing rates. The interest earned should be mentioned as ‘Income from other sources’ in ITRs.

Public Provident Fund(PPF):

The amount deposited in Public Provident Fund qualifies for deductions for up to Rs.1.5 lakh under Section 80C of the IT Act, 1961. The interest earned and withdrawals from the PPF account are tax-free. Also, the amount that you receive upon maturity of the PPF account is not taxable. Any contribution to the PPF account of the spouse of the subscriber is also eligible for tax deduction. In the event of the death of the subscriber, the PPF amount received is exempt from tax. PPF is offered for 15 years. The minimum amount of deposit allowed is Rs.500 while the maximum is Rs.1,00,000. The rate of interest offered on Public Provident Fund is currently 8.7% compounded on an annual basis.

Andhra Bank Senior Citizen’s Savings Scheme (SCSS):

Deposits in the Senior Citizen’s Savings Scheme (accounts opened after December 8th, 2007) offered by Andhra Bank are eligible for deductions under 80C of the Income Tax 1961. The interest income on Senior Citizen’s Savings Scheme is liable to tax. SCSS is, therefore, a mixed bag in terms of the tax benefits it offers. It is important to note that TDS (Tax Deduction at Source) is applicable if the income of the subscriber (SCSS) is above Rs.10,000 p.a, which can be a downer for senior citizens who, in most cases, may not have income which is taxable but have to file their ITRs all the same to get back the TDS. The SCSS is offered for five years but may be extended by another three years. The interest rate (currently at 9.3%) is linked to government bonds.

Andhra Bank ULIPs:

Andhra Bank offers unit-linked insurance plans (life insurance with equity benefits) such as IndiaFirst Smart Save Plan. The premium invested in ULIPs is eligible for tax deduction up to Rs.1.5 lakh (overall limit) under Section 80C of the Income Tax Act, 1961 (the deduction will be limited to Rs.1,50,000 even if you make a higher investment). ULIPs are considered an attractive investment option by many investors owing to the tax saving benefits and returns on a long term basis. In the event of the death of the policyholder, the amount received by the nominee(s), is exempt from tax. Exemption can be sought from gross income for the maturity amount under Section 10 (10)D of the IT Act. It is important to note that no tax is applicable on withdrawals as well if the sum assured is 10X the premium (annual) chosen by the subscriber.

Under Section 80E:

Section 80E of the Income Tax Act, 1961 encompasses deduction on the interest on education loan taken for children, spouse or an assessee. Deduction can be availed for up to Rs.1.5 lakh.

Educational loans from Andhra Bank:

Andhra Bank offers educational loans to students for higher studies in either India and overseas. The students should possess admission letters from accredited institutions to avail of the loan. The eligibility is ascertained depending on the employment opportunities for the chosen course.

Under Section 80CCD:

Section 80CCD covers pension schemes offered by the central government

    • Atal Pension Yojana:

The tax treatment of Atal Pension Yojana was unclear until recently (February 24th, 2016) when the income tax department issued a circular stating that the Atal Pension Yojana will enjoy the same tax benefits as the National Pension Scheme. The Atal Pension Yojana is notified as a pension scheme under Section 80CCD of the IT Act. Deduction up to Rs.50,000 can be claimed on the premium paid under Section 80CCD.

Under Section 80 TTA:

Section 80TTA deals with deduction vis-a-vis interest on savings account.

    • Savings Accounts:

The maximum deduction allowed is Rs.10,000 or interest earned from savings account deposits (whichever is lower). In case the interest earned is above Rs.10,000, the balance is liable to tax under the head ‘Income from Other Sources’ and taxed according to prevailing slab rates.

Andhra Bank offers various types of savings bank accounts as listed below:

      • AB Easy Savings No Frills Account:

This is a basic savings account offered by Andhra Bank without any additional facilities.

      • AB Diamond Savings Bank Account:

Aimed at well-heeled salaried employees from reputed corporates besides central and state government employees

      • AB Abhaya Plus:

Depositors can avail of accidental insurance for up to Rs.50,000

      • AB Platinum Savings Bank Account:

Offers priority locker allotment

      • Abhaya SB Account:

Provides cover against disability or death for up to Rs.50,000.

      • Abhaya Gold SB Account:

Offers insurance cover against permanent disability/death up to Rs.1 lakh

      • AB Jeevan Abhaya Scheme:

Offers group cover for depositors between 18 to 55 years.

      • AB Super Salary SB Account:

This is a zero-balance account with reverse sweep facility among other benefits

      • AB Jeevan Abhaya Double Plus

Offers group insurance up to Rs.5 lakhs against death and accident.

      • AB Jeevan Abhaya Triple Plus:

Offers group insurance scheme against accident and death for Rs.10 lakhs. Depositors between 18 to 55 years are eligible.

The tax-saving financial instruments listed above from Andhra Bank can be availed either by visiting any of your nearest Andhra Bank branches or by logging onto online platforms.