Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: Central Excise rule to resale the machines to a new company :: VAT RATES :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: due date for vat payment :: form 3cd :: list of goods taxed at 4% :: TDS :: ACCOUNTING STANDARD :: VAT Audit :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment
« News Headlines »
 India is moving towards a flawed GST
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016

Tax relief: FDs of five years or more to make the cut
July, 25th 2006

Fixed deposits of banks with a maturity of five years or more will only qualify for tax breaks with the government set to issue a notification this week.

An investment of up to Rs 1 lakh in bank term deposits of a medium maturity of five years or more will enable investors to qualify for a tax deduction of up to Rs 1 lakh starting from this fiscal.

Investments in bank deposits will now be eligible for a tax deduction similar to that offered for payment of insurance premia, payment of school tuition fee, repayment of the principal amount on housing loans besides contribution to small savings schemes under Sec 80 C of the Income tax Act.

Although the banking division of the finance ministry had recommended three years as the cut-off eligibility for a tax break in line with the banking industrys demand, the revenue department did not go along with the proposal.

The Central Board of Direct Taxes was of the view that bank deposits could not be equated with the Equity Linked Savings Scheme (ELSS) which has a lower maturity of three years and yet offers tax breaks.

Officials said that there was the element of risk in equity linked schemes compared to bank deposits especially when a large number of banks have the backing of the sovereign.

Tax breaks are being provided for the first time for term deposits considering the difficulties faced by banks in mobilising medium term funds while competing with tax free instruments like small savings schemes.

The government also acceded to the demand of the banking industry this fiscal to provide this tax break after taking into account the blistering growth in credit last fiscal. The new scheme for tax deduction for term deposits is expected to address the issue of premature withdrawals.

In all the other schemes like the Public Provident Fund and the National Savings Certificate which offer a similar tax deduction, there is a lock-in.

Earlier, banks used to cite the advantage of flexibility in withdrawals before maturity compared to small savings schemes for term deposits even though it came with a penalty in some cases. Now with a tax benefit on offer, that flexibility will go.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Content Management System developers CMS developers Content Management Solutions CMS Solutions CMS India Content Management System India CMS development India Website CMS Website Content Management India Portal CMS India CMS Outsourcing CMS Vendor Complete CMS Custom CMS Services

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions