Tax liability on saving of personal loan

Save Share

This query is : Resolved

Quick Summary

If you've taken a personal loan and deposited it into an FD, the principal amount itself isn't taxable. Only the interest earned on the Fixed Deposit will be subject to tax in the following year. For salaried individuals, you can declare the FD in your Income Tax Return (ITR), and while the interest is taxable, the initial deposit isn't. If the FD is for five years or more, you might also be eligible to claim tax benefits under Section 80C.

KLN SAGAR

KLN SAGAR (Querist)
Follow

24 March 2020 Sir,

Scenario is i took personal loan of 4L for my marriage expenses this month (march 2020). i have done FD by adding my saving to my loan amount for one year as the occasion is cancelled. My question is.

1. How to show the sum amount deposited as FD in ITR ( Salaried person). Is it taxable. How ever the bank interest is taxable.
2. Can the sum be shown as saving.

Please do suggest.

Thanks,
Sagar

Eswar Reddy S

Eswar Reddy S (Expert)
Follow

24 March 2020 FD is not taxable, only interest portion is taxable.. If the FD is for 5 years then you can claim under 80C - Tax Saving fixed deposit..

Spurto Consultancy Services

Spurto Consultancy Services (Expert)
Follow

24 March 2020 You have to pay tax on the interest earned in FDR next year.
However in the current you are not required to make any extra tax payment for the transaction.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now