Term Deposit under Section 80c

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2010 RESPECTED SIR/MADAM

WOULD YOU PLEASE TELL ME THE TAX TREATMENT OF INTEREST ACCRUED ON TERM DEPOSIT UNDER SECTION 80C,AND AS WELL AS THE TAX TREATMENT OF MATURITY AMOUNT ,

WHETHERN INTEREST ACCRUED ON ABOVE TERM DEPOSIT U/S 80C QUALIFIED AS REVINVESTMENT AND ELIGIBLE FOR DEDUCTION UNDER SECTION 80C.

PLEASE REPLY AS SOON AS POSSIBLE
THANKS

CA. Anoop Gadia

CA. Anoop Gadia (Expert)
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21 July 2010 interest is taxable and on end term the principle invested also liable to included in income of py in which such amount is received.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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21 July 2010 1) Interest on these term deposits shall be liable to tax under the Act, on the basis of annual accrual or receipt, depending upon the method of accounting followed by the assessee.
(2) The tax on such interest shall be deducted in accordance with the provisions of section 194A or section 195 of the Act.

Ref :- CBDT Notification No. 203/2006

Principal amount received on maturity is tax free.

Accrued interest will not qualify as investment u/s 80C.

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