Two schemes TDGRI (Reinvestment Type) and TDGQI (Quarterly Interest Type).
Minimum and Maximum Deposit Amount: The minimum deposit amount will be INR 100 or multiples thereof and maximum deposit amount will be INR 100,000
Lock-in-Period: Since there is an underlying tax advantage u/s 80C of IT Act, there would be a lock in period of at least 5 years on the FD under this scheme.
Type of deposit: Two types of deposits are to be offered under the scheme, one providing for quarterly compounding/reinvestment of interest (RIC scheme) and the other providing for quarterly payout of Interest (QIC scheme) to the designated operative account of the depositor.
Premature closure of Fixed Deposits:. A minimum lock in period of 5 years is stipulated to enable the deposit to be assessed as exempt from taxable income u/s 80C of the IT Act.
The maturity period of a term deposit receipt of any denomination shall be five years commencing from the date of the receipt.
No term deposit shall be en-cashed before the expiry of five years from the date of its receipt
Fixed Deposit Receipt: As per the scheme notification, tax benefits under this scheme are to be claimed through the Fixed Deposit receipt issued by the Bank.
Tax Deducted at Source: Fixed Deposits with the bank shall be subject to Tax Deduction at source as per Income Tax Act 1961.
Interest on these term deposits shall be liable to tax under the Act, on the basis of annual accrual or receipt, depending upon the method of accounting followed by the assessee.
The tax on such interest shall be deducted in accordance with the provisions of section 194A or section 195 of the Act.
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