Uttar Bihar Gramin Bank GRAMIN TAX SAVING SCHEME

If you’re looking to cut your tax bill while building a safe, guaranteed corpus, the Uttar Bihar Gramin Bank (UBGB) GRAMIN TAX SAVING SCHEME is worth a close look. It combines the certainty of a bank deposit with a five-year lock-in that encourages disciplined saving, plus tax benefits under current rules. Here’s a clear, jargon-free walkthrough so you can decide quickly.

What this scheme is (in plain English)

This is a fixed-tenure deposit that locks your money for 5 years. In return, you get:

• Assured returns at the bank’s prevailing deposit rate when you invest
• Tax benefits as per the scheme’s rules
• A choice of how you want your interest paid (monthly, quarterly) or you can opt for a 5-year recurring deposit structure if you prefer to save every month

It’s simple: put money in once (or monthly if you choose the RD format), stay invested for five years, claim tax benefits as eligible, and redeem at maturity.

Who can open it (Eligibility)

The scheme supports a wide set of profiles:

• Individuals (single) and joint holders (up to four)
• Guardians on behalf of minors
• HUFs
• Partnerships, companies, associations, societies, schools, and similar entities

Note: Tax benefits are generally designed for individuals/HUFs under Indian law, while non-individual entities may not get the same income-tax deductions. Use this account for parking funds, but confirm which tax benefit applies to your profile before investing.

How much can you invest (Investment limits)

• Minimum: ₹100
• Maximum: ₹1,50,000
  The low minimum makes it accessible; the cap helps you align with common tax-saving budgets.

Your interest options (Types & payout)

Choose the format that matches your cash-flow needs:

• M.I.D.R. (Monthly Income Deposit Receipt): Interest credited monthly—handy if you want a steady income stream
• Q.I.D.R. (Quarterly Income Deposit Receipt): Interest credited every quarter
• Recurring Deposit (5-year tenure): Save monthly for five years; useful if you prefer to spread out the investment

Interest rates are as per the bank’s prevailing rates on the day you invest. Ask the branch for the current card rate for each option and tenure.

Lock-in period (Deposit tenure)

• 5 years is mandatory.
• There is no partial withdrawal during the lock-in. Invest only what you won’t need for the next five years.

TDS and taxation (read this carefully)

• TDS on interest: Applicable as per income-tax rules. If your interest crosses the prescribed threshold or your tax declaration requires it, the bank will deduct TDS.
• Form 15G/15H: If you’re eligible to avoid TDS, submit Form 15G/15H each year (UBGB asks for it before April 15 with your signature and deposit details).
• Tax-saving benefit: Distinct from TDS. Your tax deduction (commonly claimed under relevant sections when applicable) is generally claimed in your Income-Tax Return using the bank’s investment certificate/receipt. Submitting 15G/15H does not by itself grant the 5-year tax deduction; it only governs TDS on interest. Keep your deposit receipt safely for filing.

Nomination

• Available for individual and joint deposits
• Not available for minor accounts
  Always add a nominee; it takes minutes and prevents paperwork headaches for your family.

Loan facility

• Not available under this scheme.
  If you might need liquidity, consider keeping a small separate emergency fund outside this deposit.

How returns are credited (Interest & compounding)

• Payout depends on the type you choose (monthly/quarterly income or RD).
• For payout variants, interest is credited to your designated account at the chosen frequency.
• For the RD variant, interest is built into the RD structure over five years.

Ask the branch whether interest is compounded quarterly for your chosen type; compounding frequency affects the final maturity value.

Why people choose this scheme

• Guaranteed, bank-backed returns with no market volatility
• Tax efficiency for eligible investors
• Low minimum and practical ₹1.5 lakh cap that aligns with annual tax-planning
• Choice of income frequency (monthly/quarterly) or monthly saving discipline (RD)
• Nomination for smooth succession

Who it suits best

• Salaried individuals planning annual tax-saving investments
• HUFs seeking stable, fixed-income style deposits
• First-time tax savers who prefer a simple bank product over market-linked ones
• Conservative savers who want predictable income (monthly/quarterly) during the 5-year term

Quick example (how to match the type to your goal)

• Want a monthly income from your lump sum? Choose M.I.D.R.
• Prefer fewer entries and a slightly higher effective feel due to quarterly payout? Choose Q.I.D.R.
• Don’t have a lump sum but want the tax-saving habit? Choose the 5-year RD variant and invest monthly.

Documents & application checklist

Bring originals for verification and photocopies for submission:

• UBGB application form (prescribed format)
• PAN (or Form 60/61 if PAN not available)
• ID & address proof as per KYC norms
• Photographs of account holder(s) / authorized signatories (two each)
• If investing on behalf of a minor, carry age proof and guardian KYC
• For non-individuals (where allowed), entity proof and authorization documents as per bank policy

How to open in 5 steps

1. Pick your format (Monthly income, Quarterly income, or 5-year RD)
2. Confirm today’s rate and understand TDS/compounding for that format
3. Decide your amount (₹100 to ₹1,50,000) and complete the form
4. Add a nominee (if eligible) and submit KYC + photos
5. Collect your receipt/certificate and note the maturity date (set a reminder)

Smart tips to maximize benefits

• Invest early in the financial year to lock in rates and streamline your tax planning
• Keep a copy of the deposit certificate for your IT Return; it’s your proof of investment
• If you need regular income, pick M.I.D.R./Q.I.D.R.; if you prefer growth, check the RD option
• Set reminders for Form 15G/15H (if eligible) each year and for the maturity date at year five

Bottom line: UBGB’s GRAMIN TAX SAVING SCHEME gives you a safe, straightforward path to tax-efficient saving with a firm 5-year discipline. You get assured bank returns, clear payout choices, nomination comfort, and predictable paperwork. Visit your nearest UBGB branch, check the day’s rate, and open the option that fits your cash-flow and tax plan.Extended thinking