80C FIXED DEPOSIT
This query is : Resolved
08 June 2010
Modify
Fixed deposit of Rs. 20000/- For a period of 5years for F.Y.9-10 made on 6Jan10, to avail 80C deduction.
interest on the same for F.Y.9-10 Received Rs.1200/-
Now Rs. 20000/- can be claimed as deduction u/s 80C for A.Y.10-11
Q. The interest-ACCRUED amt of Rs.1200/- is taxable or exempt for A.Y.10-11
or it is taxabe at the time of maturity?
Fixed deposit of Rs. 20000/- For a period of 5years for F.Y.9-10 made on 6Jan10, to avail 80C deduction.
interest on the same for F.Y.9-10 Received Rs.1200/-
Now Rs. 20000/- can be claimed as deduction u/s 80C for A.Y.10-11
Q. The interest-ACCRUED amt of Rs.1200/- is taxable or exempt for A.Y.10-11
or it is taxabe at the time of maturity?
08 June 2010
INTEREST EARNED IS TAXABLE.
YOU CAN TAKE INCOME ON ACCRUAL BASIS AND ALSO AT MATURITY.
YOU CAN TAKE INCOME ON ACCRUAL BASIS AND ALSO AT MATURITY.
09 June 2010
Interest earned is taxable as income from other sources. you hav got two options:
1) show the income on accrual basis & don't pay tax when it is received on maturity.
2) include in the income only on maturity & pay tax accordingly.
There is one problem. BAnk is going to deduct TDS on the interest income on maturity. If you go by Option(2) no probs. If you opt for Option 1 & want Bank not to deduct TDS (as taking refund could be time taking), then you need to submit a prescribed form to the bank with AO's approval.
So it's upto you to decide.
1) show the income on accrual basis & don't pay tax when it is received on maturity.
2) include in the income only on maturity & pay tax accordingly.
There is one problem. BAnk is going to deduct TDS on the interest income on maturity. If you go by Option(2) no probs. If you opt for Option 1 & want Bank not to deduct TDS (as taking refund could be time taking), then you need to submit a prescribed form to the bank with AO's approval.
So it's upto you to decide.
09 June 2010
The interest on FD will be taxable as per accrual basis year by year
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