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POSTED BY ON June 29, 2013 10:32 pm COMMENTS (3)
Hello Sir,
I have been paying my Recurring Deposit since september 2011 in Indian Bank. It will be matured on September 2013. Can i get IT exemptions for the interest on that RD from 1st April 2012 to 31st March 2013? Or only after maturity i can show the interest for that RD in my IT filing?
Thanks,
Swami
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No you cannot. Tax on Rds have to be payed on accrual basis. That is you pay tax on interest earned each FY. Since you have not paid earlier you will have to do so upon maturity.
Use this calculator to find out your tax liability.
http://freefincal.wordpress.com/recurring-deposit-calculator/
If you like to see more about the rules concerning RD and FD taxation you can see my post titled:
Comprehensive Fixed Deposit Calculator – I: Total and Advance Tax Liability
So now i cannot show this RD’s interest in IT deductions right? only after it is matured, i can show the interest in my IT deductions right???
What deduction? RD interest is fully taxable as per slab. When the RD matures please show the entire interest as income from other sources, compute tax and pay up!