Filing income tax for RBI 7.75% Savings Taxable Bonds for FY23-24
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07 August 2024
Hi,
I had invested in RBI 7.75% Savings taxable Bonds during Nov 2017 with Maturity in Nov 2023 with cumulative option through my HUF account. In non-cumulative option, interest is payable half yearly but in cumulative it is paid during maturity. During all these 7 yrs, no TDS was deducted on the annual interest earned. But in my ITR2, I have been showing the interest accrues every year (based on compounding) so that I dont have to apy income tax on the entire interest accrued at the time of maturity. Just before the maturity, I wrote to HDFC bank asking them not to deduct TDS by filling for 15H on the entire interest accrued at the time of maturity saying I have already been showing the annual interest earned in my ITR2 like it is done for cumulative FD. But they said these RBI bonds are not like cumulative FD and we will show entire interest accrues at the time of maturity in form 26AS and deduct TDS on full amount. Hence, In Nov 2023 at the time of maturity, they showed Rs 12 Lakhs as interested earned on Rs 20L principal invested amount and deducted 1.2 Lakhs as TDS. Out of this 12L cumulative interest for 7 yrs, I have already shown around 9.6 Lakhs in previous years ITR2 and hence only need to show balance 2.4L as interest accrued from these bonds for FY23-24 under Income from Other Sources. So pls guide me how do I show this 2.4L as income from other sources because form 26as is showing 12 L interest income under Section 193 and hence if I just show 2.4 Lakh income and hence claim refund of 1.2 L TDS, then it total income will not reconcile with what is there in form 26as. Is there anyway I can show that out of 12L 9.6 is already claimed in earlier ITR and hence only 2.4 is taxable. Otherwise I will have to incur a loss of Rs 1L as the tax on 12L and also it is unfair from RBI perspective to charge all the interest income on maturity although it is accrued annually. If I would have gone for non-cumulative option, then I would have got the income half yearly and it would reflect in form 26as, then the same accrual principal should apply to cumulative also (like in FD) otherwise people going for cumulative option will have to pay heavy tax as per their income slab on the whole accrued interest in the last year at the time of maturity. Pls help as I need to file the return asap.
Thx,
Ashok Kumar Singhal
Karta HUF account
Ph - 9845674767
I had invested in RBI 7.75% Savings taxable Bonds during Nov 2017 with Maturity in Nov 2023 with cumulative option through my HUF account. In non-cumulative option, interest is payable half yearly but in cumulative it is paid during maturity. During all these 7 yrs, no TDS was deducted on the annual interest earned. But in my ITR2, I have been showing the interest accrues every year (based on compounding) so that I dont have to apy income tax on the entire interest accrued at the time of maturity. Just before the maturity, I wrote to HDFC bank asking them not to deduct TDS by filling for 15H on the entire interest accrued at the time of maturity saying I have already been showing the annual interest earned in my ITR2 like it is done for cumulative FD. But they said these RBI bonds are not like cumulative FD and we will show entire interest accrues at the time of maturity in form 26AS and deduct TDS on full amount. Hence, In Nov 2023 at the time of maturity, they showed Rs 12 Lakhs as interested earned on Rs 20L principal invested amount and deducted 1.2 Lakhs as TDS. Out of this 12L cumulative interest for 7 yrs, I have already shown around 9.6 Lakhs in previous years ITR2 and hence only need to show balance 2.4L as interest accrued from these bonds for FY23-24 under Income from Other Sources. So pls guide me how do I show this 2.4L as income from other sources because form 26as is showing 12 L interest income under Section 193 and hence if I just show 2.4 Lakh income and hence claim refund of 1.2 L TDS, then it total income will not reconcile with what is there in form 26as. Is there anyway I can show that out of 12L 9.6 is already claimed in earlier ITR and hence only 2.4 is taxable. Otherwise I will have to incur a loss of Rs 1L as the tax on 12L and also it is unfair from RBI perspective to charge all the interest income on maturity although it is accrued annually. If I would have gone for non-cumulative option, then I would have got the income half yearly and it would reflect in form 26as, then the same accrual principal should apply to cumulative also (like in FD) otherwise people going for cumulative option will have to pay heavy tax as per their income slab on the whole accrued interest in the last year at the time of maturity. Pls help as I need to file the return asap.
Thx,
Ashok Kumar Singhal
Karta HUF account
Ph - 9845674767
11 August 2024
As per RBI clarification, under cumulative scheme, the LTC gain received on redemption of such bonds is taxed at 10% rate without indexation.
30 August 2024
Good luck.
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