Prashant Kishor has nearly ₹8 crore in FDs: How much tax could he pay on this massive corpus?

A large chunk of Prashant Kishor’s financial portfolio is parked in fixed deposits, much more than what he has invested in equities. FDs offer the comfort of predictable returns and relatively low risk, but also mean a bigger tax bill as interest income accumulates. So, how much could this FD-heavy strategy cost him in taxes?

Prashant Kishor, founder of the Jan Suraaj Party and the newly elected MLA from Bihar’s Bankipur, has declared assets worth nearly ₹198 crore in his election affidavit filed for the bypoll held on July 30.

The election marked a first for the former poll strategist, who entered electoral politics as a candidate and won the contest.

His financial holdings span several investment avenues, including real estate, fixed deposits, mutual funds and bonds.

Here's a look at how his money is allocated across different asset classes:

Fixed deposits: Prashant Kishor has fixed deposits worth around ₹7.36 crore, all held with HDFC Bank, according to his election affidavit.

Equity: His shares and mutual funds are worth around ₹63 lakh

• He has 1,985 shares of Bharti Airtel, which is around ₹38,11,994
• He holds 73,243 shares of Indian Overseas Bank, valued at around ₹25,32,743.

FD tax implication

One striking feature of his portfolio is the stark difference between his fixed-income and equity investments: ₹7.36 crore is parked in fixed deposits, compared with just ₹63 lakh in equities.

Without getting into the finer details of his portfolio, let’s look at how such a large FD corpus is taxed—and what the tax implications could be.

The ₹7.36 crore that Kishor has invested in fixed deposits is not taxable. The tax is payable on the interest earned from those FDs. So let's take two assumptions here.

Kishor's tax slab = 30%

FD interest rate = 7%

We also need to factor in that an individual paying tax at the 30% rate must also pay a 4% Health and Education Cess on the tax amount.

Here's how much Kishor will be paying in taxes on his FD

With ₹7.36 crore invested in fixed deposits, assuming an annual interest rate of 7%, Prashant Kishor would earn around ₹51.52 lakh in interest each year. At a 30% income-tax rate, this would result in a tax of about ₹15.46 lakh. Adding the 4% Health and Education Cess of ₹61,862, his total tax liability on the FD interest would come to around ₹16.08 lakh.

According to the affidavit, Kishor and his family have movable assets worth nearly ₹122 crore. Their immovable assets are valued at ₹86.29 crore (non-agricultural land worth ₹9.75 crore and residential buildings worth ₹76.54 crore), bringing the total declared assets to around ₹198 crore.