EEE, EET and ETE De-jargoned

EEE, EET and ETE are three basic terms used for investment done for tax saving purposes. Investments are made either with an intention to grow the capital on investment or to save tax. Your money is taxed at different stages of investment– when you invest in an instrument, when your investment yields interest or returns, and when you withdraw the lump sum amount (sum of your principal and returns).

Read more
Guaranteed tax savings
Under sec 80C & 10(10D)
₹1 Crore
Invest ₹10k per month*
Zero LTCG Tax
Unlike 10% in mutual funds
All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply
+91
View Plans
Please wait. We Are Processing..
Plans available only for people of Indian origin By clicking on "View Plans" you, agree to our Privacy Policy and Terms Of Use #For a 55 year on investment of 20Lacs #Discount offered by insurance company Tax benefit is subject to changes in tax laws
*All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply.
Get Updates on WhatsApp
All savings are provided by the insurer as per the IRDAI approved insurance plan. Standard T&C Apply

There are three ways in which tax is implied to your investments. Through this article, we have tried to help you understand the category under which your investment falls and the exemptions. 

EEE-Exempt Exempt Exempt

The first exempt here means that your investment qualifies for a deduction. Therefore, part of your salary that is equal to the invested amount is not taxable. The second exempt implies that the interest earned during the accumulation phase is also exempted. The third and final exempt here means that the income you generate from the investment would not be taxable at the time of withdrawal.

EEE status is usually applies tolong-term investment instruments, such as Employee Provident Fund and Public Provident Fund. Some other instruments such as life insurance policies and equity-linked savings schemes (ELSS) also fall under the EEE status. Also, the New Pension System will enjoy the EEE status as per the revised draft Direct Taxes Code, but ELSS and insurance-cum investment plans will move to the EET category.

EET-Exempt Exempt Taxable

The EE here denotes that your invested money is exempted at the stages of contribution as well as accumulation. The T denotes that the lump sum amount you withdraw is taxable. Since your lump sum i.e. principal plus returnis taxed at the time of withdrawal, the returns from such investment instruments eventually come out to be low;but it also depends on your tax slabs. For instance, if the rate of return on a person’s investment is 8%, and the he falls under the 20% tax bracket, then he will receive returns at the rate of 6.4% on investment.

ETE-Exempt Taxable Exempt

The first exempt here means that the amount of your income equal to the investment amount is eligible for deduction subject to the total exemption limit. The interest from these investments is taxable and the same is denoted by T or taxable. The third term, exempt, indicates that the lump sum amount withdrawn at the time of maturityis tax free.Therefore, if you have invested in an instrument with ETE status, then only the interest component of your investment will be taxable. For instance, a fixed deposit for a term of 5 yearsfalls under the ETE status, then the amount you invest towards the FD is eligible for a deduction, the interest accrued is taxable but the maturity amount is exempted from tax. NSCs and Bank Tax saving fixed deposits are the best examples for this category.

Written By: PolicyBazaar - Updated: 01 July 2021
Search
Disclaimer: Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by an insurer.
Newsletter
Sign up for newsletter
Sign up our newsletter and get email about Investment Plans.

Investment plans articles

Recent Articles
Popular Articles
Dena Bank NRE FD Rates

09 Aug 2021

Dena Bank is a public sector bank that offers need-based options...
IDBI Bank NRI FD rates

28 Jul 2021

Fixed Deposits or Saving Bank accounts are good options to...
Know All About NRE PIS Accounts

28 Jul 2021

A solid investment in NRE PIS and NRE non-PIS accounts can help...
Bank of Maharashtra NRE Fixed Deposit Rates

28 Jul 2021

Bank of Maharashtra is offering a wide range of fixed deposit...
Citibank NRE FD Rates

28 Jul 2021

Citibank offers Fixed Deposit NRE accounts for the NRI's...
Best LIC Policies For Investment in 2021
When it comes to purchasing a life insurance plan, 'LIC policies' are the most popular choice for customers. LIC...
What is Investment and What is Its Purpose?
Different people possess different notions and understanding of “investment”. To start with, first of all...
Post Office Monthly Income Scheme (POMIS)
Are you looking for an investment avenue which is safe and secure, earns substantial returns with a short locking...
SBI Life Insurance Plans in India
SBI Life Insurance, a joint venture between State Bank of India (SBI) and BNP Paribas Assurance, provides...
Short Term Investments Options
Short-term investments can be described as temporary investments or marketable securities, which can be easily...
Close
Download the Policybazaar app
to manage all your insurance needs.
INSTALL