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Fixed Deposit

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Sivakumar R

6 Points Posted on 10 January 2020

A five year deposit has been taken for tax exemption purpose for my wife for Rs.40,000/-
The fixed deposit is maturing during February 2020. Shall I have to take and consider the interest amount or whole maturing amount (FD AMOUNT+INTEREST AMOUNT) in the taxable income or request the bankers to deduct the tax amount in the present salary tax slab.

Kindly reply.

Thanks and Regards

Sivakumar R

Replies (2)

Quick Summary

This discussion clarifies the tax implications of a maturing Fixed Deposit (FD) taken for tax exemption. The user inquired whether the entire maturing amount or just the interest earned is subject to tax. The consensus is that only the interest earned on the FD is taxable, not the principal amount itself.