Interest income
This query is : Resolved
30 March 2021
Interest on post office time deposit for 5 years is paid/credited annually. For the purpose of filing tax returns should the interest be considered on accrual basis or on actual credit basis ? No TDS is deducted by post office .
Ganeshbabu K
(Expert)
30 March 2021
Interest on FD,to be offered under "income from other sources", can be declared on "cash basis" as per section 145 (1) of the Income tax Act,1961 meaning there by FD interest can be offered in the year of maturity if the assesse so opts provided that method has to be regularly followed.
Hence, if the assessee follows mercantile system, then income will be computed on accrual basis. If assessee follows cash system, then income will be computed on cash basis.
Hence, if the assessee follows mercantile system, then income will be computed on accrual basis. If assessee follows cash system, then income will be computed on cash basis.
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