tax on intt on rd of post office

[Deepali Balpande]

hi every one
please slove my query.

if we invest on recurring deposit of post office for five years.then will intt on recurring deposit is taxable on yearly basis or on maturity.

please clarify me on this point.

waiting for reply....

thanks & regards,

deepali

[n garg]

yes that on yearly basis. the income has come into existance on yearly basis. no benifit of tax deduction is available now only 80C for investment .

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[Astarag]

Hi,

 

as sec 80L no longer exists the: interest on RD in Post office

is chargeable income under IT

 

The intrest on RD is calculated on quarterly rest

and the same is reinvested in the scheme

 

as the interest earned is taxable and the amount invested is exempted u/s 80C(2)(xxiv) (for five year term only)

 

Therefore one way u can show the intereste earned during the year as an income in the Tax return and on the other hand you can claim exemption u/s 80C(2)(xxiv) for the same amount as the interest is reinvested in the scheme

 

as a result of this, on maturity you will be liable to pay tax on the interest earned in the last year only because you have already claimed exemption in the 4 previous years for the interest earned and reinvested in the scheme

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with regards,

Cs. P.A. Patnaik