Latest Expert Exchange Queries

GST Demo Service software link: https://ims.go2customer.com
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft info@binarysoft.com
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) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
 
 
 
 
Popular Search: Central Excise rule to resale the machines to a new company :: TDS :: empanelment :: form 3cd :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: cpt :: articles on VAT and GST in India :: due date for vat payment :: list of goods taxed at 4% :: ACCOUNTING STANDARD :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: ACCOUNTING STANDARDS
 
 
News Headlines »
 Use ITR-2 to show salary and capital gains income
  TDS Applicability On Government Contracts Under Gst (Under Section 51 Of The Cgst Act, 2017)
  How to file ITR for FY 2016-17 and all the links you need
 All about E-way Bill under GST
 Good and simple tax: on the GST regime
 Seeks to extend the time limit for filing of GSTR-1, GSTR-2 and GSTR-3
 Good news, find Tax Return Preparers soon at a place near you; 5 things to know
 Filing of GST return
 Why cement companies are going in for M&As
 Govt moves to rework direct tax law after PM’s nudge
 New offer available for filing tax returns online, how to avail

`Tax exemption on FDs an investment opportunity'
August, 02nd 2006

 

Investors looking for risk-free investment schemes with the added benefit of tax exemption, now have one more avenue to invest their funds. The Finance Ministry, in a notification issued on Monday, has said that bank fixed deposits (FDs) of five years and above are eligible for tax exemptions under section 80 C.

This means fixed deposits with banks up to Rs 1 lakh with tenure of five years and above will get the same treatment as Public Provident Fund and National Savings Certificates. Just as is the case with other savings schemes, except PPF, the interest earned on the FD would be taxed. But the advantage is the shorter minimum lock-in period of five years, unlike PPF where the lock-in period is 15 years, said senior bank officials.

According to Mr S.S. Mundra, Deputy General Manager, Bank of Baroda, this move is definitely an improvement on what was prevailing for bank FDs. "For depositors there is an added incentive of shorter lock-in period. For banks, the interest payout is not much as the rates were moving upwards in any case," he said.

Mr V. Vaidyanathan, Country Head-Retail Banking, ICICI Bank, said, "There is a renewed interest towards FDs because of the volatility in the stock market. Mutual funds and stock markets are subject to market risk, while FDs are not. This will open new investment opportunity to customers."

The tax exemption comes with a clause that payment before maturity is not allowed. But banks are waiting for further clarity on allowing depositors to take a loan against the deposit before the term ends, said Mr D. Krishnamurthy, General Manager, Bank of India.

"This was expected as it was announced in the Budget and as a product it is more useful to the public. Now bank FDs are on par with RBI bonds and postal savings, with the added convenience of opening a FD with a bank, as most investors have bank accounts," he said.

A senior official from State Bank of India also agreed that while more clarity is required on the notification, the move would help banks leverage their deposit mobilisation programmes. "We can gain more deposits thanks to this tax exemption. Bank FDs are more liquid than NSC and can be enchased easily," the official said.

According to Mr B.L. Javeri, General, Manager, Planning, Union Bank of India, a bank FD would give investors the advantages of higher return, liquidity at marginal cost along with tax exemption. "At the time of maturity, withdrawing an FD is hassle-free unlike a post office savings," he said.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Application Management Solutions Application Management System Application Management Software System Application Management Development Application Management Software Development

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