Fixed deposits are one of India’s favorite investment options and most people approach a bank to open one. But do you know that many Non-Banking Finance Companies (NBFCs) also offer the facility to open fixed deposits? These are called Company Fixed Deposit and are governed by the Reserve Bank of India (RBI). Like typical fixed deposits, the Company Fixed Deposits also offer a fixed rate of return for the fixed tenure. But there are several advantages over Bank FDs.
However, one should do thorough research by looking into credit rating, the company background, and its repayment history.
Any individual, HUF or Corporate can invest in a fixed deposit scheme.
This fund is Suitability investors:
The interest income from Company FDs is added to the Total Income of an investor under the head ‘Other Income’, and accordingly taxed as per the tax slab of the investor. If the estimated annual interest is likely to exceed Rs.5000/- during the financial year, then the interest payment will be subject to tax deduction at source (TDS).
However, to avoid such deduction of Tax, the investors can furnish self-declaration in Form 15G/H or by submitting the Exemption certificate from the perspective income-tax authority for every financial year.