NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Taxation of Debt Products
Meera, a resident individual in the 30% slab (ignore surcharge and cess), earns Rs 40,000 interest on a bank fixed deposit and Rs 25,000 interest on corporate bonds during the year. No other special provisions apply. What is the tax payable on this interest income?
Interest from the bank deposit and corporate bonds is added up and taxed at the slab rate. Rs 65,000 at 30% gives Rs 19,500 of tax. Taxing only one of the two sources would understate the liability.
- ARs 19,500Correct
- BRs 12,000
- CRs 7,500
- DRs 9,750
Explanation
Both interest items are taxed as Income from Other Sources at slab rate. Total interest = 40,000 + 25,000 = Rs 65,000. Tax at 30% = Rs 19,500. Rs 12,000 taxes only the FD, and Rs 7,500 taxes only the bonds.
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