Taxability of accrued interest on fixed deposit
This query is : Resolved
Vishal Kumar
(Querist)
13 February 2013
How is accrued interest on bank fixed deposit taxable in each year during the term of the fixed deposit?
CA PARAS BAFNA
(Expert)
13 February 2013
In case of FDR interest is earned on the basis of duration of the FDR and Bank is generally crediting your account by the interest accruing on FDR on quarterly basis.
As such the value of the FDR increases.
.
So, interest is taxable on the basis of interest certificate issued for the year/period by the Bank in respect of the FDR.
.
As such the value of the FDR increases.
.
So, interest is taxable on the basis of interest certificate issued for the year/period by the Bank in respect of the FDR.
.
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