fd

Tax-saving fixed deposits FD good tool for investors

rajstar — Mon, 11 Feb 2008 12:59:36 -0500

In Budget 2006, the government extended tax benefits to five-year tax-saver deposits. As per the existing provision, you are eligible for exemption on five-year deposits on investments up to Rs 1 lakh. These fixed deposits will be locked for a five-year period from the effective policy date. So, you cannot exercise the option of premature withdrawal.

Now You have to pay tax on that FD

rajstar — Mon, 11 Feb 2008 12:56:17 -0500

Ever thought you might have to pay tax on income you are yet to receive? You are, and in your favourite instrument – the good old bank fixed deposit – at that.

In bank FDs, one has to pay tax on the interest earned at the end of a financial year even if the interest would be paid at a later date, or maybe years later.