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    HomeNewsBusinessPersonal FinanceFixed Deposit - How Taxation can affect your Returns?

    Fixed Deposit - How Taxation can affect your Returns?

    Investors are moving towards debt instruments led by poor performance of equity market and lucrative returns offered by debt. Driven by current market situation, FDs has gained popularity in recent times. However what most investors neglect is the taxation aspect attached to it. Read this space to know how taxation can affects your FD returns

    April 03, 2012 / 11:13 IST

    Equity markets have been highly volatile during the last few years. Still recovering from the last fall, coupled with steep rise in interest rates, most of the investors have since looked for safer avenues to safeguard their investments. Although, among all debt instruments, Public Provident Fund(PPF), National Savings Certificate (NSC), Post Office Monthly Income Schemes (POMIS) always command high priority, Fixed Deposits(FDs) by banks have gained popularity in recent times. The primary reason is the attractive interest rates offered by the banks along with sovereign guarantee, giving investors a sense of security.


    However, within this euphoria, most investors neglect taxation aspect while investing in fixed deposits. What they failed to consider is that taxation can significantly lower returns generated by this instrument.


    Check out interest rate offered on Fixed Deposits by various Banks


    How FD is taxed

    The interest income earned through fixed deposit is taxable, if the interest amount exceeds Rs 10,000, in any financial year. This income is added to your total income under header
    first published: Mar 22, 2012 12:55 pm

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