accounting in cash basis

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Ravi Kumar Rajgaria (Querist)
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10 August 2010 We prepare our accounts in cash basis.So no any provisional entry is passed.

As on 31st March bank deduct TDS on accrued interest on FD but we do not treat accurued interest as income in F. Y. 2009-2010.

What will be the accounting treatment and in which F. Y. interest will be taxable?

CA Punit

CA Punit (Expert)
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10 August 2010 Interest will be taxable in F.Y. 2009-10.
lets see wht othr experts say...

VINOD ARORA

VINOD ARORA (Expert)
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10 August 2010 Agreed, TDS by bank is deducted after crediting the amount in bank account. Therefore the amount is treated as received and hence taxable in the same year.

Shudhanshu Agrawal

Shudhanshu Agrawal (Expert)
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10 August 2010 Interest will be taxable when it will be received by you. But as bank has to follow accrual basis accounting and they have to comply with TDS provisions, Tds shall be deducted.

In this situation just adjust TDS deducted with your income tax liability and if there is no income tax liability then claim refund from the deptt.

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