Ask Experts Questions for FREE Help !
Ask
    dashiing's Avatar
    dashiing Posts: 1, Reputation: 1
    New Member
    		  
    #1

    May 12, 2010, 04:01 AM
    Prospective income from Loan - Tax implication
    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.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    May 12, 2010, 08:30 AM
    This looks like an INDIAN tax question; this forum deals EXCLUSIVELY with U.S. tax issues.

    From a U.S. tax perspective, the interest earned IS taxable income.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Does a LOAN need to be included as INCOME on tax return? [ 17 Answers ]

Hello, I have an IRA and GRA account with TIAACRREF. In 2008, I took out $5500 from my IRA (for which I have to pay a 10% early withdrawal penalty) and I also got an "internal" loan from my TIAA Cref GRA (Group Retirement Account) for $7000 (Distrubution code "G"). I was told that I do not have...

Income tax benefit clarification for Housing loan [ 2 Answers ]

Hi I am Vineet Chattree, working with a TATA group. I purchased a flat in Chembur in December 2005. At that time builder declared 80% completion from Bank. However, I decided to start with EMI in place of pre-EMI based on 80% slab. Builder promised to give accommodation by June 2006, but...

Income tax rebate on housing loan. [ 1 Answers ]

Hi, I would like to know what is the income tax rebate that I can get On the housing loan. I have recently bought a property and took housing loan for the same. The property is in the form of Two 1 Bhk Flats adjacent to each other which I wish to join together later. So on what princiapal and...

Income tax rebate on housing loan [ 2 Answers ]

I have taken housing loan from my office in the yr.2002 for flat under construction.I have already started deduction from my salary for the above loan.I have taken possession of the above flat in the current yr 2007. Shall I get income tax benefits for the accrued int.ffrom theyr 2002.If yes or no...

Calculation Income Tax for Housing loan [ 2 Answers ]

How to treat Housing Loan, LTA for computation of income tax,

View more questions Search