Exemption under income tax
bhanu pratap720
(Querist) 18 January 2012
This query is : Resolved
an income tax payee wants to create an FDR worth rs 10 lakh . the person will earn monthly interest on it. will he/she recieve any exemption under income tax act ?
ajay sethi
(Expert) 18 January 2012
is your income below the taxable limit ?
if you are creating an fixed deposit of rs 10 lakhs bank will deduct TDS from interest unless you inform the bank that your income is below the taxable limit
Sanjeev
(Expert) 18 January 2012
The rule is that a person can invest a amount u/s 80C in Bank FD which is a 5 year speacial deposit and cant be withdrawn before that term. That Rs 1,00,000 is reduced from his Gross Total Income for that year.
This is a deduction which he gets in the year of placing FD and so every year he need to invest new Rs 1L. The amount is presumed to be invested from the current year earnings.
The interest earned on such FD would be treated as Income from other sources and would be added to the total Income to compute the taxes.
Vineet
(Expert) 21 January 2012
No exemption on interest income. It will be included in taxable income as income from other sources and charged to tax at normal rates dpending upon the slab under which the income of person falls.
