Query – interest earned on Fixed deposits

POSTED BY SP Pathan ON February 28, 2013 6:25 pm COMMENTS (2)

Hi,

Just wanted to check, whether is it a good way of dealing investing in fixed deposits without paying taxes.

I have come across from one of my colleague, who is working with me. He had invested 25K/Month (recurring Deposit) in some co-operative bank for 1year & he got matured amount of almost 3.2lakhs & reinvested/deposited in FD’s in different multiple banks/branches to avoid TDS & also without submitting his PAN Card.

As he did not submit his PAN Card to the banks, he is not showing/adding interest amount earned to his income, while submitting form C.

Is there any possibilities, Can IT Department track his interest earned on FD’s and will be any issues in future?

Thanks, SP Pathan.

 

2 replies on this article “Query – interest earned on Fixed deposits”

  1. Dear S P Pathan, I do have a real life example from Ahmedabad where this multiple small Fds in multiple banks multiple branches was done by a person & due to core banking his tax evasion was caught. What your friend is doing is not tax saving but a clear cut case of tax evasion. sooner or later he ‘ll come into the tax net & that time, he w’d have to face the consequences of his past wrong doings.

    As an honest tax paying citizen I promote tax saving through leagal wats & not tax evasion from illegal wways.

    Thanks

    Ashal

  2. First he should have paid tax on the RD interest.
    Second this kind of wrong practice is quite common. KYC norms are now mandatory for all bank customers. So eventually he will be forced to submit his PAN. At which time the taxman will knock on his door and collect all dues with interest.

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