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Tax period for interest on savings account

Anand (Others) (31 Points)

28 July 2014

Hi,

My bank statement shows interest credited on 30th June and 31st December each year. For filing my IT returns how do i show interest earned for the period Jan to March as i have no statement of breakup for that period (3 months)

Thanks

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6 Replies

Fenil Shah (Audit & Tax Executive) (402 Points)
Replied 28 July 2014

Take it in Receipt basis, means take interest received during the FY 2013-14.

Hitesh Khanna (Accounting & Finance Taxation Company Law Audit ) (839 Points)
Replied 28 July 2014

1.It is advised to Approach the Bank and ask them to give the interest statement earned from January to March.

2.In case the Bank is unable to provide such a statement it is again advised to ignore such Interest while preparing Comutation of Total Income for the Period 31-MArch as there is no evidence to support the same.

CA Saloni (Manager-Accounts & GST Consultant) (5124 Points)
Replied 28 July 2014

Dear anand,

I agree with fenil.......

You should consider you interest on receipt basis ie. consider it in the year in which it is received.

Z ( ) (2960 Points)
Replied 28 July 2014

Date of accrural of interest is when constructive credit is given in the account,which is generally twice a year, Interest does not accrues on daily basis,though it is computed on daily basis.It accrues when you get the right to recieve it

There is a case of Federal Bank Ltd. 2008 wherein it was upheld that only real income is assessable to tax, even if interest income is bifurcated in the books as receivable in course of time, it will not mean that interese has infact been accrued.

Suppose interest is given in Dec and June, then for FY12-13 you wont bifurcate the interest recevied in June 2013 into Jan-Mar and Apr-June

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Anand (Others) (31 Points)
Replied 29 July 2014

Thanks everbody for your advice. Actually the bank has changed its interest schedule recently so earlier financial years i had no problem as it was nearly coinciding with the financial year.

At the time of filing returns (July 2014) i have already recieved the interest in the bank for the period Jan to June 2014 but as mentioned earlier no breakup.

I think as all have adviced i will file the above in the next financial year. only concern is the interest amount for that period is higher than usual as i had received a big amount during that period which was in my savings accounts for three months till i invested it