Accrued Income

This query is : Resolved

Nitin (Querist)
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20 August 2010 Suppose FD is for Rs.1lac @10% p.a. for 3 years. we declare the accrued interest on a yearly basis in the return of income. Please explain in detail how we can show the TDS.
For eg.
FD 100,000/- @10% * 3years
total interest 30,000/- for 3 years
TDS = 3,000/- (@10%)
If TDS cert. be issued at the end of 3 years, then how to show the income in COI on an accrual basis?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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20 August 2010 If FD interest is accured by the bank in the last year only then show income in last year only without accruing interest in previous years.

The answer given before was based on that interest is accrued by bank every year.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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20 August 2010 In my opinion, if you show 30000/- income as well as TDS of 3000/- in the 3rd year, its a correct position.

But, as you said that you are showing interest earned on accrual basis, then in this situation, I think, if you take TDS of 3000/- in third year, it should be fine. The reason for this thought is that you have added 10000/- income in the last 2 years without getting any TDS benefit so in the 3rd year you can show interest as Rs. 10000/- & TDS as Rs. 3000/-

But, I am keeping this query open for inviting views of other experts too.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
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20 August 2010 .

Aditya Maheshwari

Aditya Maheshwari (Expert)
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20 August 2010 My answer still would be book interest as per accrued certificate from bank.

Nitin

Nitin (Querist)
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21 August 2010 Hi Subhash, Aditya

How will the answer differ if the interest is from a co. and not bank?

Nitin

Nitin (Querist)
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21 August 2010 Hi Subhash, Aditya

How will the answer differ if the interest is from a co. and not bank?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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21 August 2010 Ask for loan confirmation and TDS will be deducted yearly if interest exceeds Rs. 5000/-. So TDS certificate will also be issued yearly. If not then show income in year in which TDS deducted.

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