If i deposit 10000 in Banks Tax saver scheme for 5 years , and availed 80C exemption in 2015-16. In subsequent years e.g. 2016-2017 the interest accrued will be income for tax calculation in 2016-2017? OR Either Total interest on maturity in the year 2020-2021 will be Taxable or will be taxfree till reinvested? Secondly, Yearly interest taken into account as income in subsequent years and paid taxes thereof yearly will not affect total interest payable at the time of maturity may be in the higher slab at the maturity year.
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Tax saver scheme in banks ,tax calculation
Replies (2)
The interest, though it is reinvested in the tax saver Fd for 5 years, is not eligible for deduction u/s 80C. The deduction is available for the principal only in the year the FD was made.
Its better to tax the interest on accrual basis in each year (based on interest certificates if available) instead of taxing in the last year.
Thank you Mme Your answer is well defined and crystal -clear to understand to anybody. My querry is resolved !
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