Interest on fd treatment

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harsh (Querist)
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10 April 2013 I have a confusion regarding the entry to be passed for interest receivable on fixed deposit as on the year end date ( say 31/3/13)
Please help me for the same

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)
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10 April 2013 Pass the following entry as on 31-3-2013

Interest on FD receivable a/c dr
To Interest on FD a/c

(Being Interest on FD accrued for the year treated as income)

At the time of interest on FD receipt I.e as on the date of FD mature pass the following entry for interest portion on the FD

Bank a/c dr
TO Interest on FD receivalbe a/c

(Being interest accrued on FD received)

Note: In case if any TDS deducted by the bank on the accrued interest portion then the entry is

Interest on FD receivable a/c dr
TDS receivable a/c dr
TO Interest a/c
(Being interest on FD accrued for the year after deduction of TDS treated as income)

At the time of TDS amount received

Bank a/c dr
TO TDS receivable a/c
(Being TDS amount refunded by the IT department)

In case if the TDS amount adjusted with the tax payable if any then
Capital a/c dr
TO TDS receivable a/c
(Being tax payable for the year adjusted with the TDS receivable amount)

For the above: Interest on FD receivable account shall be recognise under assests side of the balance sheet and Interest account shall be recognise in the P&L account and TDS receivable also recognise at the assets side of the balancesheet.

OM SAI SRI SAI JAI JAI SAI

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harsh

harsh (Querist)
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10 April 2013 I understood the concept. Thanks a lot for clearing my doubt.

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