Question about tax saving fd and ppf?



if i anvest 1 lakh in a tax saving fd, and if it matures in 5 years will the 1 lakh and the interest earned be added to my income in that year?
Similarly if i invest 1 lakh per year in the ppf, after 15 years will the maturity value to added to the income of that year?

3 Replies to “Question about tax saving fd and ppf?”

  1. If you invest in FD, interest earned every year is to be added in your income.
    Bank will deduct tax at source if income is more than Rs.10000.

    Whereas in PPF interest income is tax free. what ever may be the amount of interest.



  2. If you invest in FD for tax saving benefit then you have to go with 5 Year Tax Saving Fixed Deposit
    Amount is locked in for five years

    TDS will be deducted when interest payable or reinvested per customer, per bank branch, exceeds Rs 10,000 in a financial year.

    If you are exempt from paying tax, you need to present Form 15G/H when you open a Fixed .Deposit and subsequently at the beginning of the following financial year.

    At the end of the financial year, the TDS will be deducted on the basis of interest accrued on the Fixed Deposit (s) even if this interest has not been credited.

    About PPF
    PPF comes under “EEE”(Exempt, Exempt, Exempt) method of taxation — wherein it is exempted at the points of investment, interest earned is totally exempt from tax and this applies to final maturity amount as well.

    http://mutual-funds-personalfin.blogspot.in/2011/07/how-is-ppf-treated-for-tax.html





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