Tax payable on 1cr fix deposit with bank.

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  1. Rajvir Singh

    Rajvir Singh New Member

    Hello all.
    My father sold his business and has about 1 crore cash. He is planning to make a 8 year fixed term deposit in bank. 50 lac on his name and 50 lac on his wife's name. He is 68 and she is 58. Both are pan card holders.

    I understand they have to pay taxes on interest earned as per indian tax slabs. I would like to know if there will be further deductions on income earned or, on deposit amount.
    I will really appreciate the help and support.

    Rajvir
     
  2. Amit Sahni

    Amit Sahni Active Member

    In case of FD, only tax is levied on the interest amount.

    However, when you deposit the Rs 50 Lakhs cash in bank - they will ask you for the source of such funds.
     
  3. Rajvir Singh

    Rajvir Singh New Member

    Thanks heaps Sahni.
    So no TDS or other deduction apply when money will be withdrawn after 8 years ?

    And I asked him referring to your comment that bank might ask for the source of money , he can only prove 20 lac. So, Apperently there's another question. How can he show the source of 80 lac ?
    Rajvir
     
  4. Amit Sahni

    Amit Sahni Active Member

    If he has paid tax on this amount received in cash - then its fine.

    If tax has not been paid on this amount received in cash and you deposit the same with the bank, the income tax dept may send an income tax scrutiny asking for the source of funds.
     
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