1. What is a Corporate FD?
The Corporate Fixed deposit (CFD) is one of the most preferred investment options that enable investors to earn assured returns on their deposit over a specific period. It is provided by the corporates such as finance companies, housing finance companies, and other types of NBFCs (Non-Banking Financial Company)
2. What are the schemes of deposits available?
Cumulative as well as non-cumulative schemes are available for deposits.
3. What is the difference between a non-cumulative deposit and a cumulative deposit?
In a non-cumulative scheme, the interest is payable on a monthly, quarterly, and half-yearly basis. The scheme will be convenient for clients who require a periodical interest payment. In the cumulative deposit scheme, the interest is payable at the time of maturity along with the principal. This scheme is suitable for people who do not require periodical interest payments and this can be thought of as a money multiplier scheme.
4. What is the minimum deposit amount for the cumulative deposit & the non-cumulative deposit schemes?
5. Can a deposit be made in the name of a minor alone?
Yes. The deposit can be made in the name of a minor provided the minor is represented by his/her natural or legal guardian and the application form for the deposit is signed by the natural/legal guardian, on behalf of the minor. All communication in relation to the deposit shall be addressed to the guardian.
6. If the parents of the minor are not alive, then who is to be deemed as the guardian?
Only the person(s) who have been appointed as guardian(s) by the competent court should sign the application. A copy of the court order has to be submitted while investing.
7. What are the options for renewal?
Currently, we are not having any renewal option.
8. Do you accept NRI deposits?
The NRI investments are accepted on a non-repatriation basis. The terms and conditions governing the NRI deposits are given:
Acceptance of deposits can be made only by Indian Rupee through the NRO account.
NRI Deposits shall be accepted only through payments made from the depositor's NRO a/c in India.
Deposits with funds transferred from NRE or FCNR (B) a/c will not be accepted.
NRI Deposits shall not be accepted by any inward remittance from overseas.
The NRI deposits have given the following declaration:
The amount deposited with Mahindra & Mahindra Financial Services Ltd. represents the amount transferred from the NRO account. Further, this amount does not represent inward remittance from overseas to the NRO account or transfer of funds from the NRE/FCNR(B) account to the NRO account.
The depositor has to furnish his NRO bank account no. as both the principal and the interest shall be credited to the depositor’s NRO bank a/c only.
The tax will be deducted at the rates prescribed by the income tax law in force from time to time from the interest amount irrespective of the quantum of interest.
INCOME TAX PROVISION RELATING TO FIXED DEPOSITS:
TDS with respect to NRI deposits
- The limit of Rs 5000/- on interest for the purpose of the tax is not applicable.
- Declaration u/s 197 in Form 15G/H for non-deduction of tax will not be applicable. However, a lower deduction certificate obtained from the income tax department can be furnished for claiming a nil or a lower rate of tax.
- The tax rate will be 30.9% as per the provision of section 195 of the Income Tax Act,1961.
- If a Double Tax Avoidance Agreement (DTAA) exists with the country of which the investor is a resident, then the applicable tax rate will be lower than the DTAA rate or income tax rate. However, to claim the benefit of the DTAA rate, the Tax Residency Certificate will have to be furnished. In the event of non-furnishing of the Tax Residency Certificate, the higher tax rate as per the income tax act will apply. Further, to claim the lower rate as per the DTAA, an Indian PAN will also be required otherwise the tax rate will be 30.9% as per the Income Tax Act.
- The depositor is also requested to furnish details of their Indian and overseas address.
9. If the sole depositor dies, what are the documents required?
An attested copy of death certificate, term deposit receipts, will or testamentary disposition, if any, or an attested copy of legal heirship certificate issued by a Tahsildar/corporations.
10. Will the deposit be paid back in cash?
No, the Deposit will be directly credited only to the corresponding bank account updated.
11. How to view the credit of the Tax Deducted (TDS) by the company?
The TDS information can be viewed from the NSDL website (in Form 26AS) by simply registering on the NSDL website, please visit the site for further details: https://incometaxindiaefilling.govt.in/portal/login.do
12. When will the TDS certificate be dispatched?
The TDS certificate will be dispatched to the client on
Quarter 1-last week of May
Quarter 2-last week of October
Quarter 3-last week of January
Quarter 4-last week of May
13. What type of certificate do you get for the tax deducted at the source and how is the certificate generated?
For the tax deducted at source, tax deduction certificates in the prescribed form 16A, giving details of the interest remitted to govt., etc. will be sent on a quarterly basis if the deposit is under the quarterly scheme, the half-yearly basis for deposit under the half-yearly scheme, and at the end of the year in case of cumulative deposits.
TDS certificates in form NO.16A are generated quarterly on the basis of details provided in the quarterly TDS statement filed by the deductor of Tax in the TIN (Tax Information Network). For deduction of tax at source made on or after 01.04.2011, the TDS certificate in Form 16A will be generated by the company through the TIN central system and which is downloaded from the TIN website with a unique TDS certificate number and shall be authenticated by using the digital signature.
14. Is it not enough to furnish the Form only once at the time of placing the deposit?
Yes, form 15G/H will have to be submitted at the beginning of each financial year covering all the existing deposits and if the deposits are made during the year then a new Form 15G/H will have to be submitted. However, if there are any changes in the Income Tax laws, then a new form 15G/H would be required to be submitted.
15. What is the range of tenure available for fixed deposits?
A Fixed Deposit can be opened for a minimum period of 12 months to maximum tenure of 60 months.
16. When will the interest be credited in the Non-Cumulative scheme?
In a Non-Cumulative scheme, the interest will be credited on the Last day of every month in case of Monthly, the Last day of March/June/September and December in case of Quarterly, the Last day of March and September in case of Half-Yearly and Last day of March in case of Yearly. The first interest will be paid on the last day of the subsequent month in which the FD is processed E.g. If the customer has initiated the FD on 20th March and has requested monthly interest, the same will be paid on the subsequent month-end that is 30th April.
17. Who can invest in fixed deposits with the Company?
The investments can be accepted from Individuals, NRIs, companies, Partnership Firms, Hindu Undivided Family (HUF), Trust and Foundations, and Unincorporated Associations.
18. What are the interest frequencies available and modes by which the interest is paid?
The options for payment of interest are Monthly/Quarterly/Half Yearly and Yearly. The interest is directly credited to the bank account via NEFT (National Electronic Fund Transfer).
19. When will be the monthly interest paid to the client?
1. Monthly payout will be paid on the last day of every month.
2. Certificates that are generated before the 23rd of every month are eligible for the payout on the same month.
3. If the certificate is generated after the 23rd, interest will not be paid on the same month and it will be paid at the end of the next month which includes the backdated interest amount as well.