LIVE GST Certification Course by CA Arun Chhajer begins 21st April. Register Now!!

Withdrawal of investment in bank fd

Anushree (Service) (135 Points)

30 March 2015

Dear Experts,

I want to know what are the tax implications upon an individual.

I have invested certain sum in bank fixed deposit for 5 years and claimed deduction under 80 C 2 years back.

If i have withdraw the sum today due to exigencies ,how would that impact my tax this year?

Reply
Follow
Share

9 Replies

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 30 March 2015

Then the principal amount you claimed as deduction shall be taxable in the year of premature withdrawal.

2 Like

CS ( Dr.) Rajeev Babel (Practicing Company Secretary) (284 Points)
Replied 30 March 2015

The deposits made under Tax Savings Scheme is not allowed to be encashed before the expiry of five years from the date of its receipt. Further no loan is also to allowed against the security of such TDRs.

1 Like

Sriram (CMA Final) (178 Points)
Replied 30 March 2015

No term deposit shall be en-cashed before the expiry of five years from the date of its receipt

1 Like

Rajesh Kumar Gupta (Senior Divisional Manager) (714 Points)
Replied 30 March 2015

I agree with Dr. Babel. Further Interest accrued on FD is taxable in the fy in which it accrues. Not taxed in year of receipt as taxed earlier in 5 years. You have to ensure tax is paid at marginal rate net of tds if any. Form 15 G/H allowed.

1 Like

Anushree (Service) (135 Points)
Replied 31 March 2015

Dear Experts,

I am aware that withdrawal is not permitted.

In case of exigencies/emergencies,withdrawal was made .How will the law react to that?

CS,CA F,Numrologi TusharSampat (CS CA F Numerologist Astrologer Graphologist Face reader Vastu Expert) (85930 Points)
Replied 31 March 2015

Law does not give anty exception even in case of emergency withrdarwal , hence if it is withdrawn then it shall be taxed in the year of such withdrawal.

1 Like

Bhupesh Kukreti (chartered accountant) (21 Points)
Replied 31 March 2015

Agreed with above comments. ...!!

Ashok J (CA Final) (880 Points)
Replied 01 April 2015

From law point of view u hv to pay tax in the year of withdrawal by adding FD amt to Taxable income....But in reality, if u hv salary income, dont offer FD to tax. simple. Further, if u hv business/prof income and ur under scrutiny or something, then offer it to tax...

I mean to say, bank will neither ask for ur IT return copy nor will they deduct tax on maturity of FD.....At the end its ur wish....i only suggested an idea to escape if u hv salary income

CS ( Dr.) Rajeev Babel (Practicing Company Secretary) (284 Points)
Replied 01 April 2015

I have already given the reply above. It may be mistake on the part the concerned bank branch and may be the cause concern of their Internal / Concurrent Auditor. From the Assess's point of view, it is recommeded to be the honest in paying the taxes.