Interest on tax saving term deposit

Plz let me know if interest form tax saving certificate is taxable or is treated in the same manner as NSC interest is treated....
Replies (4)

All interest earned is taxable if its not earned from some tax free bond or specific category of instrument.

A certificate saving your tax under 80C will attract tax on the interest income it brings.

Thanks Amit

just tell me one more thing what will happen if i reinvest the interest in the tax saving bond.Will the treatment be same....Reply asap..!

DEAR ALL,

 

INTEREST ON ANY SECURITIES EXEMPT ONLY WHEN IT IS MENTIONED UNDER SEC 10(15) OF THE IT ACT, 1961. THERE IS NO WHERE MENTIONED UNDER THE ACT THAT IF U GET DEDUCTION U/S 80C FOR CERTAIN INVESTMENT, U WOULD NOT BE ALLOWED TO GET THE EXEMPTION OF INCOME EARNED OUT OF THAT INVESTMENT. U HAVE TO TOTALLY DEPEND UPON THE SEC 10(15). IF INTEREST EARNED FROM THE BONDS, CERTIFICATE MENTIONED UNDER SEC 10(15)(i), EXEMPTION IS ALLOWED. EXEMPTION IS ALLOWED NOT ONLY FOR INTEREST EARNED ON PRINCIPAL AMOUNT INVESTED BUT ALSO ON THE INTEREST EARNED ON CUMULATED INTEREST ACCRUED EARLIER.

Following are the notified bonds, certificates, etc.- Notified for purposes of section 10(15)(i)

Sl. No.

Name of securities, bonds, annuity certificates, etc.

Maximum amount

(1)

(2)

(3)

1.

12-year National Savings Annuity Certificates

Whole of the amount

2.

National Defence Gold Bonds, 1980

Whole of the amount

3.

Special Bearer Bonds, 1991

Whole of the amount

4.

Treasury Savings Deposit Certificates (10 years)

Whole of the amount

5.

Post Office Cash Certificates (5 years)

Whole of the amount

6.

National Plan Certificates (10 years)

Whole of the amount

7.

National Plan Savings Certificates (12 years)

Whole of the amount

8.

Post Office National Savings Certificates (12 years/7 years)

Whole of the amount

9.

Post Office Savings Bank Accounts

Whole of the amount

10.

Public Account of the nature referred to in item (6) in the Table below rule 4 of the Post Office Savings Account Rules, 1981

Rs. 5,000

11.

Post Office Cumulative Time Deposits Rules, 1981

Whole of the amount

12.

Scheme of Fixed Deposits governed by the Government Savings Certificates (Fixed Deposits) Rules, 1968

Whole of the amount

13.

Scheme of Fixed Deposits governed by the Post Office (Fixed Deposits) Rules, 1968

Whole of the amount

14.

Special Deposit Scheme, 1981

Whole of the amount

THANKS .... FOR THE INFO..!

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