In tax saving FD only interest is taxable or final amount?


Self Employed

If we deposit 1,50,000 in tax saving FD scheme for 5 years, the final amount we will get after 5 years is 2,31,419 (assuming at 7% every year and compounding).

My question is, in the year the FD will be matured, would this final amount of 2,31,419 will be taxable or only the interest 81,419 is taxable. Because the tax expemtion of 1,50,000 under 80C is for the year in which it is deposited and the year it will mature will be 5 years later.

Thank you.

 
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As I understand, interest income alone is taxable as and when accrued.


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Self Employed

Originally posted by : Poornima Madhava
As I understand, interest income alone is taxable as and when accrued.

 

Hope it is correct. Thank you for the reply Ms. Poornima.

 
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Service

Only Interest is taxable.


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Self Employed

Originally posted by : shailesh
Only Interest is taxable.

 

Only interest, then it is great. Thank you for the information Shailesh.

 
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only interest is taxable because fd is your investment and not your earning.

and it will be part of income of other source.

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Self Employed

Originally posted by : Vishal Varun
only interest is taxable because fd is your investment and not your earning.and it will be part of income of other source.

 

It is income which we are investing into an FD, to save tax. Thank you for the reply Vishal.

 
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Chartered Accountant

5yrs Tax Saver FD invested Under 80C only amount invested is eligible for tax exemption. Interest is Taxable on accural basis every year and not at the end of 5 years.

 

VK


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Self Employed

Originally posted by : CA. Vinodh Kothari
5yrs Tax Saver FD invested Under 80C only amount invested is eligible for tax exemption. Interest is Taxable on accural basis every year and not at the end of 5 years.

 

VK

 

I wanted to ask this question too, is interest taxable every year? You have answered this question too.

Thank you very much for the information Mr. Vinodh.

 
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Accountant.

agree with above

thanks & regards

ramanuj

 


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