ATTENTION Income Taxpayers! This bank offers 7 per cent interest on RISK-FREE tax-saving plan; check details

In India, there are around 5.83 crore income taxpayers. The government has given income taxpayers two options - one is the old tax regime and the new tax regime. While the new tax regime has a lower tax slab, it doesn't offer deductions while the tax rates are higher in the old tax regime but one can claim deductions under various sections, thus reducing their tax burden.

Income taxpayers often invest in certain instruments to reduce their taxable income. These instruments include Life Insurance Policy, Systematic Investment Plans, ULIP, New Pension Scheme, Equity-linked Tax Saving Scheme, Public Provident Fund, and National Saving Certificates etc. All of these instruments come with different interest rates and some even come with risks as well.

One of these tax-saving instruments is Canara Bank's Tax Saver Scheme. Canara Bank Tax Saver scheme is a term deposit scheme under the Fixed Deposit stream and is best suited for salaried class, businessmen, and professionals. The bank is offering an interest rate of 7 per cent on this risk-free fund that comes with a lock-in period of five years.

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Senior Citizens are eligible for 0.5% and Employees/Ex-employees/Ex-employees Senior Citizens are eligible for a 1% additional rate of interest over and above the applicable interest rate under the Canara Tax Saver Deposit scheme.

The maximum investment under this scheme is Rs 1.5 lakh and deductions can be claimed under Section 80C of the Income Tax Act 1961.

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The account cannot be closed prematurely so if you have invested in this scheme, you will have to forget it for five years. Suppose you have invested Rs 1.5 lakh in the Canara Bank Tax Saver scheme, then you will earn an interest of Rs 62,217 at the rate of 7% and will get Rs 2,12, 217 at maturity. This fund can be a good option for those who don't wish to take risk of equity investments.

In the case of senior citizens, the return will be Rs 67,492 at the rate of 7.5 per cent and in the case of ex-employees, the return on the investment would be Rs 72,892 at the rate of 8 per cent.