How is the tax on Sukanya Prosperity Plan, PPF and FD Income?

Even nowadays, there are a large number of people who want to invest money in a place that guarantees income. Such people are willing to take less risk. Such people favor projects such as Bank FD, Public Futures Fund and Sukanya Prosperity Project. But all these plans are tax-free even after they are exempt under 80C. Tell us which projects are not exempt at three different levels.

What is EEE Status

EEE means exempt, exempt, exempt. When you invest, you are exempt under 80C. The second exception is that no tax should be paid on income earned during your savings period. The third and final exception is that even when the money is withdrawn, the amount is completely tax-free. EEE status is usually available on long-term investments.

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How is Bank FD (Fixed Deposit) taxed?

Bank FDs are fully taxable. TDS is charged at the rate of 10 per cent on interest earned from bank FDs.

PPF (Public Futures Fund)

Under Section 80C of the Income Tax Act, you can claim tax deduction for investments up to Rs 1.5 lakh. The PPF account expiration is 15 years, but it can be extended to another 5 years.

Sukanya Prosperity Project Investment

Like the PPF, the Sukanya Prosperity Scheme is also tax free. This is also the EEE which means that the tax deduction is available at three different levels. Investments made under this scheme are eligible for exemption under 80C.

Bank Fixed Deposit Rates

Bank FD is considered a safe investment. The top banks in the country are yielding between 5.4% and 5.5%. At the same time, interest on SBI FD ranges from 2.9% to 5.4%. FDs are still very popular with people because of their income.

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