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Fixed deposits are
among the safest modes of investment; nationalized,
private, or foreign, are governed by the RBI's rules
and regulations, and give due weightage to the
interest of the investor. In fact all bank deposits
were insured under the Deposit Insurance & Credit
Guarantee Scheme of India, which has now been made
optional.
1.
The amount invested in fixed deposits with a
maturity period of 5 years in a Scheduled bank is
eligible for tax deduction under section 80C but the
interest earned on the deposit is taxable.
2. Tax will be deducted at the source, if the
interest income on a fixed deposit per annum exceeds
Rs.10000.
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