Form 9A and Form 10 Of Income Tax Act

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VIPIN GUPTA (Querist)
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21 August 2024 Dear sir,
We are a society registered U/s 12A and 80G. We are having an FDR of Rs 2 Crores and on that the interest accrued but not received is Approx Rs 15 Lacs the interest gets added to FDR amount.

We are also falling short of 85% utilization of our Gross receipts. Sir my question is do we have to file two forms form no 9A for interest of FDR accrued but not received and form 10 for short utilization of 85%.
my second question is do we have to add the interest accrued but not received in total receipts and then calculate 85% or exclude the interest figure and then calculate 85%

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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23 August 2024 Trust accounts should be on cash basis and not on accrual basis.
Don't add interest accrued but not received in total receipts.

VIPIN GUPTA

VIPIN GUPTA (Querist)
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23 August 2024 Sir the bank is showing FDR interest in 26AS and AIS and deducting TDS on it. That is why we are showing it on accrual basis. and submitting Form 9A

Asha Kanta Sharma online

Asha Kanta Sharma online

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12 August 2025 Let’s address both your questions step by step, with current interpretation under Income Tax Act and CBDT guidelines.

✅ Situation Summary:
Society registered u/s 12A & 80G
Holding FDRs worth ₹2 Cr; interest accrued ₹15 lakh, not received
TDS deducted and shown in Form 26AS / AIS
Unable to meet 85% application requirement
You're planning to file Form 9A and possibly Form 10
🔍 Q1: Do we need to file both Form 9A and Form 10?
✅ Yes, you may need to file both, depending on your situation:
🧾 Form 9A:
This is filed when you want to apply income in the next year, not the current year.
You're showing interest on FDRs on accrual basis (because TDS is deducted and reflects in 26AS).
Since income is accrued but not received, and you'll spend it in the following year, you can file Form 9A to defer the application.
🔸 File Form 9A on or before the due date of filing ITR (generally 30th September) under Explanation 1(2) to Section 11(1).
🧾 Form 10:
This is filed when you want to accumulate income (not apply it) for up to 5 years, for a specific purpose.
If even after deferring through 9A, you still fall short of 85% application, then the balance can be accumulated via Form 10.
🔸 File Form 10 if you want to set aside unutilized income for future application for charitable purposes.
📌 So:
If... Then...
You will apply the income (₹15 lakh interest) in the following year File Form 9A
You are not applying the full 85% of gross income even after deferral File Form 10 for the remaining balance
🔍 Q2: Should interest accrued but not received be added to income for 85% application calculation?
This is a key area of confusion. Here's the correct position:
💡 Normally, trusts follow cash basis of accounting unless they choose accrual (and it’s consistent).
However, since:
Your FDR interest is accrued
TDS is deducted and shown in Form 26AS & AIS
You are recognizing interest on accrual basis in books
➡️ Then yes, interest accrued but not received must be included in income for Section 11(1) 85% application calculation.
✅ If income is recognized, it must be considered for 85% application rule, and if not spent, you must file Form 9A or Form 10, as applicable.
📌 CBDT Circular No. 5/2017 confirms:
“Where income has been credited to the books and offered to tax, it must be included for purposes of 85% application, regardless of cash receipt.”
✅ Conclusion:
Issue Action
Interest accrued on FDRs Include in income if you're recognizing it
TDS deducted and shown in 26AS Recognize income; show TDS in ITR
Income not spent this year File Form 9A to allow spending next year
Still fall short of 85% File Form 10 for accumulation
Accounting method Stay consistent — cash or accrual

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