Broker charges on interest income from fixed depos

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Abhishek Kumar Srivastava (Querist)
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02 March 2012 Hi,

I had invested Rs. 50,000/- in JP Associated FD for 3years at 11.50% per annum (cumulative option). This investment was done through a broker.
This investment was done on 12-Jan-2011. the accrued interest for period 12-Jan-2011 to 31-Mar-2011 was Rs. 1,255. JP Associated deducted TDS of Rs. 125/- on this interest and I paid the rest of income tax of Rs. 263/- (calculated at 30% tax bracket) for FY 2010-11. This interest of Rs. 1,255/- was calculated at 11.50%

However, due to my personal needs, I had to redeem this FD pre-maturely after 10 months on 14-Nov-2011. Due to this pre-mature withdrawal, the applicable interest rate became 9.50%. So the total interest calculated was Rs. 4,129/- for duration of FD from 12-Jan-2011 to 14-Nov-2011. A TDS of Rs. 309/- was deducted for FY 2011-12. Also, a further broker charges was deducted as Rs. 722/-.

The final amount received by me was Rs. 2,973/-
Interest = Rs. 4,129/-
Less: TDS= Rs. 125/- (FY 2010-11)
Less: TDS= Rs. 309/- (FY 2011-12)
Less: Brokerage= Rs. 722/-

My question is:

1. Can I reduce brokerage of Rs. 722/- from interest income?

2. Since the new applicable rate of interest has now come down from 11.50% to 9.50%. The interest for FY 2010-11 will be less that Rs. 1,255/-. But I computed my tax liability based on this and filed my return as well. So, can I still go ahead and calculate my income from interest for FY 2011-12 as Rs. 2,874/- (Rs. 4,129 - Rs. 1,255)?

Regards,
Abhishek

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 March 2012 Expenses incurred to earn the interest income are allowed as deduction from the income.

Abhishek Kumar Srivastava

Abhishek Kumar Srivastava (Querist)
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02 March 2012 Hi Siddhartha,

Thanks for the answer.
What about question number-2 above?

Regards,
Abhishek

Abhishek Kumar Srivastava

Abhishek Kumar Srivastava (Querist)
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02 March 2012 Hi,

looking forward to answer to question-2.

Regards,
Abhishek

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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02 March 2012 You should obtain an interest certificate from the bank, which will give you the exact amount of interest paid during each of the years.

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