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Tax on principal of tax saving 5 year fd

C R GOPINATHAN NAIR (Associate Financial Planner) (43 Points)

21 May 2014

Sir,

May I know whether principal of a tax saving 5 year bank FD has to be added to income on maturity of FD and is taxable.

Also please explain whether deduction under 80EE is available during FY 14 15

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8 Replies

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 21 May 2014

as u know any amount invested in 5yr FD is allowed as deduction u/s 80C. but what about the intt. on FD. so u have two options here.. either accrue int. yearly and include in your income or include total maturity value as your income in the year of maturity.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 21 May 2014

deduction under 80EE is available for the FY 13-14 & 14-15. before claiming deduction here, please do check that you satisfy the conditions for claiming this deduction.

Mihir (Wealth Manager) (5293 Points)
Replied 22 May 2014

Only interest portion of FD is taxable and not the principal amount.

Madav (Senior Consultant) (172 Points)
Replied 22 May 2014

Principal received on maturity of any fixed deposit including tax saver deposit consider as capital receipt therefore will not be considered as income under income tax act... Deduction u/s 80 EE is allowed only to an individual only. Deduction will be allowed on interest payable to any financial institution on loan taken for acquisition of residential property provided certain conditions are satisfied 1. Loan should be sanctioned during fy 2013-14 2. Loan amount should not exceed 25 lakhs 3. The value of house property should not be more than 40 lakhs 4. taxpayer should not own any residential property on the date of loan sanction Deduction amt is limited to 100000 on interest paid or payabke on the property... if this amount is not utilised durinf fy 2013-14 than tax payer can claim balance amt next year... It is being noted that deduction taken under this section will not be allowed in any other section

Piyush Mittal (Article Assistant) (63 Points)
Replied 22 May 2014

Only interest amount received on maturity is taxable ..principal amount not taxable..

CA. Amit G. Chandani (Entrepreneur/Consultant) (1312 Points)
Replied 22 May 2014

Deduction u/s 80EE is allowed even in FY 2014-15, if amount claimed in FY 2013-14 was below 1 lakh, subject to a total deduction of 1 lakh in both financial years.

C R GOPINATHAN NAIR (Associate Financial Planner) (43 Points)
Replied 22 May 2014

My query was whither principal of a tax saving 5 year bank FD is to be added as income in the year of maturity and tax is to be paid on the principal also. I received contravercial remarks.

Now I am more confused. Plese provide relevent sections of IT act supporting the

remarks