80C FIXED DEPOSIT

This query is : Resolved

john (Querist)
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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?

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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08 June 2010 INTEREST EARNED IS TAXABLE.
YOU CAN TAKE INCOME ON ACCRUAL BASIS AND ALSO AT MATURITY.

CA.Pujah

CA.Pujah (Expert)
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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.

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Pankaj Jhawar

Pankaj Jhawar (Expert)
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09 June 2010 The interest on FD will be taxable as per accrual basis year by year