Need information regarding tax on fixed deposit?

I have some 12lakhs. i wanted to invest it on a property next year. I am planning to deposit this amount in bank for 1 year.
I wanted to know about the tax deductions?
if i fill the TDS form will i be exempted from tax?
Which is a better way to invest i.e, investing the full amount in a single deposit or splitting the amount and depositing in different banks?
Please suggest some other investment plans where i can invest this amount other than FD for 1 year.

3 Replies to “Need information regarding tax on fixed deposit?”

  1. For a fixed investment in a given time frame, fixed deposits are OK. If the interest is more than 5000/= in the year, bank will charge interest. So investing more than about 60,000/= in each bank.will attract tax.

  2. 1) If you need the money after 1 year, then, only a bank FD can give you the safety and liquidity that you are looking for. The returns are also not so bad now at 8.5 to 9 %.
    2) Splitting to avoid tax for such an amount is so cumbersome that it is not advisable. So just pay the tax if you are in the tax bracket.

  3. If you want to avoid tax, then you have to split ur principal amount i.e.12lacs almost 20 times, which I believe is not practically feasible.So my suggestion will be to invest the entire amount in some nationalized bank and give the necessary tax.At the end you would definitely have a better return than just dumping the money in ur savings account and getting around 3.5%p.a.

Leave a Reply

Your email address will not be published. Required fields are marked *

two + 14 =