CA Amit Kumar Khaitan
(Research Analyst)
(360 Points)
Replied 28 July 2010
All interest earned is taxable if its not earned from some tax free bond or specific category of instrument.
A certificate saving your tax under 80C will attract tax on the interest income it brings.
Neha
(CA Final and CS executive)
(224 Points)
Replied 29 July 2010
Thanks Amit
just tell me one more thing what will happen if i reinvest the interest in the tax saving bond.Will the treatment be same....Reply asap..!
Manoj BG
(Tax Professional and in Service)
(1795 Points)
Replied 29 July 2010
DEAR ALL,
INTEREST ON ANY SECURITIES EXEMPT ONLY WHEN IT IS MENTIONED UNDER SEC 10(15) OF THE IT ACT, 1961. THERE IS NO WHERE MENTIONED UNDER THE ACT THAT IF U GET DEDUCTION U/S 80C FOR CERTAIN INVESTMENT, U WOULD NOT BE ALLOWED TO GET THE EXEMPTION OF INCOME EARNED OUT OF THAT INVESTMENT. U HAVE TO TOTALLY DEPEND UPON THE SEC 10(15). IF INTEREST EARNED FROM THE BONDS, CERTIFICATE MENTIONED UNDER SEC 10(15)(i), EXEMPTION IS ALLOWED. EXEMPTION IS ALLOWED NOT ONLY FOR INTEREST EARNED ON PRINCIPAL AMOUNT INVESTED BUT ALSO ON THE INTEREST EARNED ON CUMULATED INTEREST ACCRUED EARLIER.
Following are the notified bonds, certificates, etc.- Notified for purposes of section 10(15)(i)
|
Sl. No. |
Name of securities, bonds, annuity certificates, etc. |
Maximum amount |
|
(1) |
(2) |
(3) |
|
1. |
12-year National Savings Annuity Certificates |
Whole of the amount |
|
2. |
National Defence Gold Bonds, 1980 |
Whole of the amount |
|
3. |
Special Bearer Bonds, 1991 |
Whole of the amount |
|
4. |
Treasury Savings Deposit Certificates (10 years) |
Whole of the amount |
|
5. |
Post Office Cash Certificates (5 years) |
Whole of the amount |
|
6. |
National Plan Certificates (10 years) |
Whole of the amount |
|
7. |
National Plan Savings Certificates (12 years) |
Whole of the amount |
|
8. |
Post Office National Savings Certificates (12 years/7 years) |
Whole of the amount |
|
9. |
Post Office Savings Bank Accounts |
Whole of the amount |
|
10. |
Public Account of the nature referred to in item (6) in the Table below rule 4 of the Post Office Savings Account Rules, 1981 |
Rs. 5,000 |
|
11. |
Post Office Cumulative Time Deposits Rules, 1981 |
Whole of the amount |
|
12. |
Scheme of Fixed Deposits governed by the Government Savings Certificates (Fixed Deposits) Rules, 1968 |
Whole of the amount |
|
13. |
Scheme of Fixed Deposits governed by the Post Office (Fixed Deposits) Rules, 1968 |
Whole of the amount |
|
14. |
Special Deposit Scheme, 1981 |
Whole of the amount |
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