03 March 2018
You need to be invested for 5 years for 80C and it is a specific deposit called Tax Saver deposit that you have to avail of. You cannot avail of a normal 5 year deposit. In this deposit, if you withdraw before 5 years the entire amount is added as income from other sources in the year you terminate the deposit. However, in case of death of depositor before maturity, legal heir or nominee gets full money and due interest and does not have to offer the income for taxation to the extent of the Principal amount and interest on which returns for income has already been filed. However tax on interest is payable till interest accrued on date of death of depositor and after that date in the hands of legal heir or nominee.
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