This budget may bring the smiles in people who are looking to invest their money bank deposits and save the tax. Most likely this budget may amend the existing restrictions on tax saving fixed deposits. Nowadays most people prefer the mutual funds as the tax savings instrument because of their 3 years lock-in period. Tax saving fixed deposit has the 5 years as the lock-in and it reduces the banks to get more depositors. Indian Banks Association(IBA) has requested the finance minister to sweeten the tax saving term deposits to lure the investors. The sources said FM is accepted their proposal and we can expect the change in the budget. The union budget will be announced on Feb 26, 2010. The following are the expected changes in the budget but it may have changes.
- The lock-in period for the tax savings fixed deposit will be reduced to 3 years. At present it is 5 years.
- As of now you can show only Rs.100000 in tax savings fixed deposit. It is expected to be increased to Rs.200000 for the financial year 2010-11.
- If the interest earned on single branch exceeds Rs.10000, it is taxable and TDS is deducted by the banker. This limit will be increased to Rs.25000.
These are all only expected changes in the budget. Part of this may be applied or they may ignore it completely. We have to wait and watch till next week. I will write the follow up mail once the budget is announced. Get free email updates to know the budget news.
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April 28, 2010 at 9:58 pm
By simply not touching the money, you earn interest at an incredible rate. Setting aside $5,000 and not touching it will be a benefit to you and your family because you’ll see a large return on investment (ROI). Term Deposit take many forms, but at Amp.com.au the requirement is to begin with a deposit of $5,000 and keeping it in a fund for a set number of years. There are more advantages to it than just earning interest.
July 22, 2010 at 5:38 pm
I agree with Steve, I invested in the AMP Term Deposits. I had a choice between property and term deposits investments and I thought as I’m not going to live in Australia for more than 5 years (I want to return to Bangalore after I’ve built some wealth) that this was the best option for someone traveling and working like myself.
January 10, 2011 at 2:18 am
Govt should announce INDIA as tax free region. No tax on any income. Just bring what Congress has accumulated in last 60 years in Swiss bank. India will not require a single rupee as tax for another 5 years if Congress bring all the black money from Swiss bank.