FD i.e Fixed Ted Deposit is the Most Popular Investment Option. FD has a Fixed Time, It Means after a specific Times FD gets Matured and Directly Credited into Your Bank Account. Time of Investment is Decided by You in the FD. You can Break FD in an Emergency. Breaking FD before the Completion of Maturity time is known as pre-mature withdrawal. You Have To Keep Some Points in Mind Before Pre Mature Withdrawl. In Pre Mature Withdrawl You have to face Some Loss. You Get the Tax Benefit if You Invest in FD for More Than 5 Years.
What is the Loss in Pre Mature Withdrawal of FD?
Premature Withdrawal of FD Results in the Loss of Interest by 0.5%-1%. Each Bank Impose Different Penalty on Pre Mature Withdrawal of FD. Some Banks donot impose any Penalty if You Break 7 Days Before Maturity.
How Tax is Calculated on FD?
Under the 80C of the Income Tax Act, The year investor takes the FD, the tax exemption of 1.5 lakh rupees is available. This benefit is available on FD schemes up to 5 years old. If you fulfill the requirement of money in the emergency, before withdrawing it, then in the year you did it, that year, the entire amount will be added to your income, on which you have taken the benefit of income tax exemption. Apart from this, the interest received will also be added to your income. After this, you will be charged tax based on the income tax slab you will come in.