CSB Tax Savings Support

As per Finance Act 2006, deposits made with banks, in terms of Central Government notification (No.203/2006 dated 28.07.2006) are eligible for deduction under Section 80 C for income tax purpose. The scheme has been short titled as ‘Bank Term Deposit Scheme 2006'. Accordingly, we have renamed the deposit scheme as "CSB Tax Savings Support".

The salient features of which are mentioned below:

1. Title and types of deposit

   Deposits can be made as ordinary fixed or reinvestment deposits under the following schemes:

   1. "CSB Tax Savings Support" - Income.
   2. "CSB Tax Savings Support" - Growth.

2. Eligibility

   The deposits can be opened by:

   1. Individuals either singly or jointly.
   2. Hindu undivided family.

   The single deposits shall be accepted from an individual for himself or in the capacity of the Karta of the Hindu undivided family.

   The joint deposits shall be accepted from two adults or from an adult and a minor jointly, and payable to either of the holders or to the survivor. * *

   * In the case of joint deposit, the deduction from income under section 80C of the Act will be available only to the first holder of the deposit.

3. Amount of Investment

   Term Deposit can be opened with a minimum amount of Rs.1000 and the maximum amount that can be deposited under the scheme is Rs 1.5 Lakh in a financial year.

4. Period of Deposit

   The minimum tenure for a Term deposit under this scheme is 5 years and maximum is 10 years (with a lock-in period for 5 years).

5. Rate of interest

   1. The rate of interest will be the rate applicable for regular domestic/NRO term deposits fixed by the bank from time to time.
   2. The interest will be paid either in lump sum at the time of maturity or every quarter/ month (at discounted rate) as per the request.
   3. Resident Senior Citizen will be eligible for additional interest fixed by the bank from time to time.

6. Nomination

   1. Nomination can be made by the single holder or the joint holders, as the case may be, in favour of any one individual.
   2. Nomination can be made any time before the date of maturity of the deposit, i.e either on the date of deposit or during the tenor of deposit.
   3. Nomination shall not be accepted in respect of a deposit applied/accepted for and held by or on behalf of a minor.

7. Encashment on maturity

   The deposit can be encashed only after five years and no premature withdrawal is allowed and shall not be pledged to secure loan or as security to any other asset.

8. Pledging of term deposit

   The deposits under the scheme shall not be pledged to secure loan or as security to any other asset.

9. Income tax

   1. Interest on this term deposits will be liable to tax under the Act, on the basis of annual accrual or receipt depending upon the simple interest or compound interest scheme and tax on such interest will be deducted as usual.
   2. The tax on such interest shall be deducted in accordance with the provisions of section 194A or section 195 of the Act.

   The amount invested in the scheme is eligible for tax exemption u/s 80C upto a limit of Rs.1,50,000/- (One Lakh Fifty Thousand Only) in a financial year.