Should I pay income tax on my Fixed Deposit which I created during my student days ?

POSTED BY karthikprasad ON August 5, 2014 6:38 pm COMMENTS (2)

Hi,

I did not find a similar question on this or any forum and hence I’m posting this.

I had invested

  • How much?- -> 50000 in an FD
  • When? –> in December 2012 when I was still a student.
  • For how many days? –> 555 days
  • Rate of interest –> 9% p.a. compounded monthly.
  • Maturity date –> June 2014
  • Interest earned –> of around 7300.

Since the amount was less than 10000, TDS was not done by the bank.

Until July 2013, I was a student and had no income; and hence was not liable to pay tax.

From July 2013 onwards, I fall under the 10% income tax slot as my annual income is above 5 lakhs.

Given the above facts, my understanding is that this year I should pay the tax only for the interest earned in the period April 2013-March 2014. Is this correct?

If yes, can some guide me on how to determine the interest earned in that financial year alone so that I add that to my total income and pay tax only on that amount?

If not, can some enlighten me as to where I am going wrong?

Thank you for your help.

2 replies on this article “Should I pay income tax on my Fixed Deposit which I created during my student days ?”

  1. Rakesh Kumar says:

    Your investment had incurred interest in following period(financial years)
    1)Dec 2012 – 31 Mar 2013 ( Student no income, nontaxable )
    2)1 Apr 2013 – 31 Mar 2014 ( income taxable)
    3)1 Apr 2014 – June 2014 (income taxable)
    So even if you have received a total interest of 7300, it will have to be split in 3 financial years. You can get to your bank to get these details or calculate it manually.

  2. Hemanth Chandra says:

    Yes, you have to pay the interest for this financial year….

    Contact the bank, they will give the breakup of the interest that you earned this year….

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