Deduction

This query is : Resolved

abhishek jain (Querist)
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24 May 2012 Amount received on maturity of time deposit would be exempt or not ? if the same has been allowed as deduction u/s 80C

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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24 May 2012 The interest on tax saving FDR is taxable on accrual basis.

The principal amount is not taxable.

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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24 May 2012 There is no income earned at the time of maturity of TD/FD. Actually, What you are getting at that point of time is what you have invested earlier.

Interest on FD/TD is accrued every year and is taxable in that particular year. Hence, you are getting tax paid amount at the time of maturity.

Note:- Deduction u/s is available for investment in FD for a minimum period of 5 years maturity but interest is taxable every year.

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