dashiing
May 12, 2010, 04:01 AM
Dear Friends
I am working with an Indian bank and as part of my renumeration the bank offers me a personal loan of 5 Lac at 2% interest rate. The bank includes the prospective benefit as my earning to increase the CTC. Assuming 12% as prevailing personal loan rate, the difference (12% - 2% = 10%) is added to my salary package and taxed accordingly.
Now my question is , if I invest this money in bank FD, am I liable to pay income tax on the interest earned?
Ideally, my earning capability of 10% has already been taxed by my employer bank as aprt of my salary package. Do I still need to pay tax when I actually realize that capability by keeping the funds in a bank FD.
I am working with an Indian bank and as part of my renumeration the bank offers me a personal loan of 5 Lac at 2% interest rate. The bank includes the prospective benefit as my earning to increase the CTC. Assuming 12% as prevailing personal loan rate, the difference (12% - 2% = 10%) is added to my salary package and taxed accordingly.
Now my question is , if I invest this money in bank FD, am I liable to pay income tax on the interest earned?
Ideally, my earning capability of 10% has already been taxed by my employer bank as aprt of my salary package. Do I still need to pay tax when I actually realize that capability by keeping the funds in a bank FD.