Premature withdrawl

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This discussion clarifies the tax implications of prematurely withdrawing from a 5-year tax-saving Fixed Deposit (FD). Tax-saving FDs typically have a mandatory 5-year lock-in period, meaning they cannot be withdrawn early, borrowed against, or used as overdrafts. If an individual has claimed a deduction under Section 80C for such an FD and then attempts to break it prematurely, it is generally not permitted. The core point is that breaking a tax-saving FD before maturity is not an option.

RAKESH

RAKESH (Querist)
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09 July 2021 sir,
someone invested in fd for 5 yrs and claim deduction u/s 8o c later on he premature of FD ,what is the head under which he is chargeable to tax after premature of FD,;

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 July 2021 Tax-saving fixed deposits have a lock-in period of 5 years. No premature withdrawals, loans, or overdraft facilities are available against tax-saving FDs

RAKESH

RAKESH (Querist)
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10 July 2021 Sir mean to say somone want to break the tax saving fd .they cannot do so.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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10 July 2021 Yes you are right........

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