NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Comparison of Products Across Categories
Meera, aged 40, is in the 30% tax slab (ignore surcharge and cess). She invests Rs 1,00,000 in a 5-year bank fixed deposit at 7% p.a. with interest paid out annually. What is her post-tax annual return on the deposit?
Her post-tax return is 4.9% a year. The 7% interest on Rs 1,00,000 is Rs 7,000, tax at 30% takes Rs 2,100, leaving Rs 4,900, which is 4.9% of the amount invested.
- A4.9%Correct
- B7.0%
- C5.6%
- D2.1%
Explanation
Annual interest is Rs 7,000, taxed at 30% as income from other sources, so tax is Rs 2,100. Post-tax interest is Rs 4,900, which is 4.9% of Rs 1,00,000. 5.6% wrongly uses a 20% tax rate; 2.1% is the tax amount as a percentage, not the return.
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