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5 year tax fd..premature encashment
My father (recently deceased) had made me nominee in his 5 year tax fds. Now 5 FDs are in various stages of maturity.
1. Can these FDs be prematurely encashed?
2. What abt tax treatment on original sum...whether reversed or foregone?
Replies (3)
An assessee can take deduction of principal amount invested in a 5 year FD with bank u/s 80C. This amount cannot be withdrawn during such period otherwise deduction allowed earlier will be taxed in the P.Y of withdrawal.
The one and only exception for premature withdrawal of such a Fixed Deposit is the death of the investor, in which case the nominee / legal heir can seek premature closure of the deposit with the bank.
The one and only exception for premature withdrawal of such a Fixed Deposit is the death of the investor, in which case the nominee / legal heir can seek premature closure of the deposit with the bank.
Thanx for reply.
What about tax deductions that my father had already taken in previous 5 Assessment Years? Will these deductions
be reversed...leaving a liability for me?
No need to reverse.
File return with his pan and disclose interest income until it get matured.
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