OPTION III: PHASED PAYOUT Investment amount: Rs50,000 Interest rate: 10.5% Let's say you invested Rs50,000 on 1 January 2010. Since there is no tax deducted at source, the interest amount is fixed at Rs5,250 (10.5% of principal). Apart from receiving an interest of Rs5,250 once every year for five years, you will get 40% of the investment amount (Rs50,000) in the third year, another 40% of the investment amount in the fourth year and the balance 20% of the face value in the fifth year.
Year
Amount -50,000
1 Jan 2010 31 Dec 2010
5,250
31 Dec 2011
5,250 25,250a 23,150b
31 Dec 2012 31 Dec 2013 31 Dec 2014
11,050c
a Rs5,250 (interest) + Rs20,000 (40% of the investment amount) b Rs3,150 (interest on the balance principal of Rs30,000) + Rs20,000 (40% of the original investment amount) c Rs1,050 (interest on the balance principal of Rs10,000) + Rs10,000 (20% of the original investment amount) Source: Mint research