Interest on fd

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This query is : Resolved

Sankar Chakraborty (Querist)

27 May 2013 DEAR EXPERTS

I WANT TO LEARN BACK CALCULATION OF THE FOLLOWING ENTRY

IN MY BOOKS FIXED DEPOSITS CLOSING BALANCE RS. 2838909.00

AS PER BANK CLOSING BALANCE 2962237.00 (WHICH IS INCLUSIVE ACCRUED INTEREST MINUS TDS @ 10%)

DIFF IS RS. 123328.00

HOW TO CALCULATE THE INTEREST OF FD AMT. AND TDS @ 10% AMT BY BACKCALCULATION
I HAVE TO ENTRY INTT ON FD AND TDS RECEIVALE IN ACCOUNTS AS BANK HAS NOT PROVIDED FORM 16A UP TO NOW.

PLEASE ANSWER

Ashok Mehta

Ashok Mehta (Expert)

29 May 2013 Calculate interest on actual number of days from the last due date. Deduct tax @ 10% plus education cess and secondary and higher cess.
This can be cross verified with the difference amount which represents 89.70% of the interest. Divide the amount by 0.897. You should get the interest amount.

Bank provides TDS certificate in June month of the Assessmemt Year

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CA Mayank Chopra

CA Mayank Chopra (Expert)

29 May 2013 Sometimes the actual interest we receive from bank differs from what we calculate on the principle amount. In that scenario, best way is:

1. Take actual amount received from bank ( In ur case Rs.2962237

2. REduce above amount from principle amount Rs.2838909

3. Balance is interest net of TDS Rs.123328

4. Since TDS will be either 10% or 10.3% (as the case may be) then divide Rs.123328 from 90% or 89.70%.

5. The amount will be either Rs.137031 or 137489 which will be the interest income.

6. TDS amount will be either Rs.13703 or 14161

Contact at 971777-5548 for further clarification

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