Taxability of accrued interest on f.d.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 February 2012 I have certain fixed deposit whose interest is accrued in current financial year 2011-12. Bank has deducted TDS on the same in this F.Y. , though the F.D. would mature in the next year. I want to ask can I pay tax on such income accrued in next financial year as i want to avoid tax as i am in a higher tax bracket this year or would I have to pay tax on the same based on accrual basis. And if this can be made taxable in next year return then how to show such in the current year return of income filed electronically ?
Please reply
Thnx in advance

CA Punit

CA Punit (Expert)
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25 February 2012 If you are following cash system of accounting for rest of your incomes, you can show this FD interest in the year of actual receipt, means the next year in your case.
Also, credit of current year TDS can be taken in next year.

Other opinions are welcomed..

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anurag

anurag (Expert)
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26 February 2012 I think as per an old notification interest on FD is always taxable on accrual basis,even if the assesse is opting for cash method of accounting.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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26 February 2012 Please see my observation (as per law) and the comments thereon (practical hurdles) in the link https://www.caclubindia.com/experts/whether-accrued-income-to-be-included-in-taxable-income--642625.asp

Querist : Anonymous

Querist : Anonymous (Querist)

26 February 2012 One of the tax expert has adviced me that such interest can be made taxable in the year of receipt provided i donot take credit of tds deducted by bank in the current year in my return of income e filed by selecting the option of *TDS NOT TAKEN* in the e return and correspondingly not showing the income in effect in this year.

Does the itr 4 provide such an option?
Does section 145A regarding books of accounts is applicable to asessee who does not maintain books of accounts as in my case ?

Please advice .
Thanks for your comments ...