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  1. krishnamurthy

    krishnamurthy New Member

    I have deposited some amount in fixed deposit in a bank for the period of 3 years. Owing to my financial commitments , i preclosed the deposit within 5 months. The bank has paid the interest on first quarter. When the bank depositing the preclosed FD amount into my SB account it deducted an amount as penalty for preclosure.

    My question is as follows:

    The bank has given Rs. 50,000 as interest.

    The bank deducted Rs. 9,000 as penalty for pre-closing.

    What is the actual amount i have earned as interest from this Fixed Deposit?

    I ask this for income tax purpose.

    Please anybody give correct answer.

  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    The actual amount earned as Interest in this case would be Rs. 50,000 - Rs. 9,000 = Rs. 41,000

    Rs. 41,000 is the interest that you have earned and Income Tax would be liable to be paid on such income under head "Income from Other Sources"

    Tax would be levied as per the Income Tax Slab Rates.
  3. krishnamurthy

    krishnamurthy New Member


    Thank you Sir.
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