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Premature fd withdrawal is taxable

Ritu (Articled assistant) (120 Points)

10 July 2014

To invest in a property i am withdrawing my fixed deposits so wil this amount be taxable ?

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6 Replies

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 10 July 2014

what was the date of making FD and for what period it was made??

Ritu (Articled assistant) (120 Points)
Replied 11 July 2014

It was.made for 12 months but only 3 months have passed and I m in need of money so as to buy a house.

Mihir (Wealth Manager) (5293 Points)
Replied 11 July 2014

Withdrawal from FD is like taking back principal amount. It is not taxable. But, the interest accrued to you so far on FD is taxable.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 11 July 2014

@ ritu... only intt accrued for 3months will be taxable not whole of FD amt.

Ritu (Articled assistant) (120 Points)
Replied 11 July 2014

ok....But what if i dont show it while filing the return....Actually my dad is goin to withdraw the fds and he is a retired employee.....i knw dat the interest element is taxable but until now i havent shown it as taxable as the tds used to get deducted nd therefore there didnt arised ny such need...but bcos v r planning to buy a home do i need to purposefully show that.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 11 July 2014

well you should have shown this amt. because 10% tds is deducted on FD intt whereas net rate of tax is 10.3% for individuals having income less than 5lakhs.... so the diff of 0.3% would have been payable by you.... now, forget the errors done in past, you will be reqd to pay the diff when you receive a notice from dept., till then forget that.... but for now, you should show correct amt this time without any error.