One of our Employees has opened a Tax deposit FD for 5 years in 2019 and he is saying and arguing that he can get a tax exemption for 5 years continuously. Is it correct?
From India, Faridabad
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From India, Faridabad
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Dear Sakshi, Generally, to become eligible for tax exemption, the investment made in that financial year is applicable. If one buys a National Savings Certificate (NSC), the savings are applicable for that financial year only. How can it be spread across an entire period of six years? Please confirm to us what type of investment scheme it was. No comments can be given unless we have complete knowledge of the investment scheme.
Thanks,
Dinesh Divekar
From India, Bangalore
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8097Thanks,
Dinesh Divekar
From India, Bangalore
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Dear Sakshi Yes he can avail the benefit as per the Sec 80C of Income Tax Act.
From India, New Delhi
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From India, New Delhi
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@Dinesh Divekar , He is seeking benefit of Tax Saver Fixed Deposits under Section 80 C for Investment made in 2019 .
From India, Faridabad
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From India, Faridabad
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Tax Savings FD Eligibility
Tax savings FD is eligible, but the FD certificate is stamped "not eligible for premature redemption/encashment" by the bank. On it, they clearly mention the financial year for which it is eligible. You can ask for the FD copy. If it is eligible, then the 80C stamp would be there, with a clear 80C clause and year.
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Tax savings FD is eligible, but the FD certificate is stamped "not eligible for premature redemption/encashment" by the bank. On it, they clearly mention the financial year for which it is eligible. You can ask for the FD copy. If it is eligible, then the 80C stamp would be there, with a clear 80C clause and year.
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Tax benefit for 5 year tax saver benefit is only for year of investment. Interest is taxable and TDS rules will apply.
From India, Pune
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From India, Pune
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Just found this on Google:
Income Tax Deduction Under Section 80C
You can take advantage of the income tax deduction provision under Section 80C of the Income Tax Act by investing up to Rs.1.5 lakh in a tax-saver fixed deposit account. The scheme ensures returns along with capital protection. However, you must note that the interest income from the account is fully taxable. The tax liability is totally dependent on your total income for the financial year and the tax slab you fall into. The interest income falls under the head ‘Income from Other Sources’. In addition, banks deduct tax at source if the interest earned exceeds Rs.40,000 in a financial year across all the accounts held with the bank. A TDS certificate will be issued to confirm the details of the deduction. Read here to know more about the taxation on FD returns.
So the income tax deduction is only for the year of investment.
From India, Mumbai
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Income Tax Deduction Under Section 80C
You can take advantage of the income tax deduction provision under Section 80C of the Income Tax Act by investing up to Rs.1.5 lakh in a tax-saver fixed deposit account. The scheme ensures returns along with capital protection. However, you must note that the interest income from the account is fully taxable. The tax liability is totally dependent on your total income for the financial year and the tax slab you fall into. The interest income falls under the head ‘Income from Other Sources’. In addition, banks deduct tax at source if the interest earned exceeds Rs.40,000 in a financial year across all the accounts held with the bank. A TDS certificate will be issued to confirm the details of the deduction. Read here to know more about the taxation on FD returns.
So the income tax deduction is only for the year of investment.
From India, Mumbai
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Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
Tax Exemption (SUPERB).doc