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: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ACCOUNTING STANDARD :: VAT Audit :: list of goods taxed at 4% :: cpt :: empanelment :: ACCOUNTING STANDARDS :: VAT RATES :: TDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: Central Excise rule to resale the machines to a new company :: articles on VAT and GST in India :: due date for vat payment :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
News Headlines »
 How to calculate capital gains tax on property sold at less than stamp value?
 Return Filing - Under GST, this is how you will file tax returns from July 1
 Income tax filing FAQs part 1
 Filing Income Tax Returns? Things To Keep In Mind As Deadline Approaches
 Filing of online return for 4th quarter of 2016-17- extension of period thereof.
 New tax accounting standards may reduce leeway for infrastructure companies
 GST – CONCEPT & STATUS – As on 01st May, 2017
 Govt extends VAT deadline, relief for developers
 Income Tax Appellate Tribunal Rules, 2017
 Got your Form 16? You should file income tax returns early to enjoy benefits
 Want to save tax? Here are 6 best investment options for you

Go back to FDs, enjoy the tax sops
August, 01st 2006

Investors now have another avenue to park their money in for the medium term and book tax benefits, besides the good old small savings schemes. If they park up to Rs 1 lakh in term or fixed deposits of commercial banks for five years or more, they will be eligible to deduct the amount from their taxable income.

This will place fixed deposits on par with schemes unveiled by the government such as the National Savings Certificate (NSC) and the Public Provident Fund in terms of offering tax breaks. In its edition dated July 25, ET had reported that the government will soon allow tax sops on bank deposits. The tax break on fixed deposits was spelt out by the finance ministry in a notification issued on Monday evening. The move is expected to help banks in building up a stable deposit base, and even lower their cost of fund. In the last monetary policy, RBI pointed out that banks should try to build a durable, retail deposit.

Unlike the schemes with administered interest rates, banks will have pricing freedom. But they can no longer sell term products as one with the flexibility of withdrawals before maturity.

As in the case of these small savings schemes, investors placing money in term deposits and planning to take a tax deduction will have to reconcile to a lock-in period of five years. The government notification says that no term deposit can be encashed before five years from the date of investment. The ceiling on investment is Rs 1 lakh.

The interest earned on these deposits will attract tax either on an accrual basis or on receipt basis.

If the deposit is made with a joint holder, then the tax benefit will be available only to the first holder. A host of banks, who were waiting for the notification, are now expected to unveil new term deposit products to attract investors.

In FY06, the government permitted investments of up to Rs 1 lakh in designated investments like PPF, NSC, repayment of the principal on housing loans and payment of education fees to be deducted from the taxable income under Sec 80 C of the Income Tax Act. However, early this year, banks managed to lobby successfully to include term deposits in this list of eligible investments.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Binarysoft Technologies - Company Overview

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