I am planning to do the post office recurring deposits. If I do those are eligible for tax exemptions? I mean can I show them in the Section 80 C? If not in what section during the investment declaration I need to show them?
Please sir, help me in understanding this.
Ramesh-There is no such tax benefits while investing and also the interest you earn is taxable according to your tax slab. This product is not eligible to show for deduction in any IT Sec. Hence, no need to show it in ITR.
HI Sir , thanks for the quick response . so i can’t get the tax benefit in investing in the post office recurring deposit , am i correct sir ? apart from that i need to pay tax on the interest i will get on this RD rite sir ?
Sir , is post office Re curing deposit or Bank Fixed Deposits , which one will be better ? and which one will give more returns sir ? For example if i deposit every month 22500 rupees for next 3 years , which one will give more returns ? and which one i can use as tax exemption during investment declaration ? please kindly suggest sir ?
Ramesh-It depends on your requirement. If you have lump sum then use FD, otherwise RD. Both almost pay the same interest rate. However, if you want to get tax exemption then opt for tax saving FDs (but they come with 5 years of lock-in). But your requirement is 3 years. Hence, you can’t invest in such tax saving FDs. Interest earned on both FDs and RDs will be taxable.
Thanks Sir , for the quick response .