80c fixed deposit maturity proceeds/interest income

This query is : Resolved

dheeraj kumar (Querist)
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01 October 2012 Sir

IF an empoloyee makes a fixed deposit
under 80c for rs. 50000then what is the treatment of interest earned and maturity proceeds
pl reply at the earliest

Regards
Dheeraj Kumar

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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01 October 2012 Interest earned is taxable while maturity peoceeds is not taxable

dheeraj kumar

dheeraj kumar (Querist)
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01 October 2012 whether the same is the case if he purchases NSC'S. or there is some difference.

tell which is better avenue for saving tax and why

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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01 October 2012 NSC interest is taxable on accrual basis but is also allowed as deduction u/s 80C.

So, net impact is NIL(provided the assessee has not exhausted the 80C limit).

dheeraj kumar

dheeraj kumar (Querist)
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01 October 2012 whether maturity proceeds of nsc's are tax free

whether interest on fixed deposit made under section 80c is not to be accounted on accrued basis

pl reply both the queries seperately

Thans & Regards
Dheeraj Kumar

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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01 October 2012 1. The maturity proceeds of NSC are tax free.

2. Interest on FDR is taxable on accrual basis.