80c

FD made in first year shall remain there for 5 years. Deduction of investmenn FD for Tax savings is for the year in which such deposit is made and NOT a continuous one. If the deposit is withdrawn before the end of the term of 5 years for which Sec 80 C was claimed, then the same has to be treated as income in the year in which the deposit is withdrawn.

As per given situations--

(1) Deduction for FD for 5 years u/s 80C can be claimed only if actual investment is made during the year. So, one will have to invest every year to avail the benefit u/s 80C i.e. investment in FD made in First year will give benefit to first year only. For claiming it for other years, one must invest in those years again.

If we talk about investment in FD for other years, my suggestion will be "yes", if it gives us more interest than investment in other options. And my suggestion wiil be "no", if any other option i.e. NSC, MF, SIP, Pention Fund etc. is more beneficial than interest income of FD.

(2) If one pre-matures FD before its 5 year period, the amount so earned will be treated as income for the year in which it has been pre-matured.

If such lady has provided form 15G which means that her total income is below the lmit of amount which is not chargeable to tax. After submission of form 15G bank will not deduct the tax and hence will not appear in form 26AS

Regards,

Siddharth Bumb (CA CS Final)