Taxation on fixed deposits

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Vaish T (Querist)
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07 May 2018 I had open FD of Rs. 1,00,000 in October 2016 for tenure of 1 year with interest rate of 7%.
The bank interest certificate showed accrued interest of Rs. 3500 till 31-March-2017 and accordingly had deducted TDS of Rs.350 for FY-16/17. While filing last year’s tax return, I had added this amount of accrued interest (i.e. Rs.3500) in the Interest income and calculated my tax.

In September 2017, the FD was matured and Bank deposited entire FD interest in my saving account minus TDS of Rs. 350. The net amount I received was Rs.7000-350-350 = 6300.

My question is;
While filing return this years’ return, Do I need to consider;
(a) entire amount of interest Rs.7000 OR
(b) amount of interest actually paid after deducing TDS by bank i.e. Rs. 6300 OR
(c) Deduct amount of Rs. 3500 from total interest (for the interest accrued last year and had paid tax accordingly) and consider only amount of Rs. 3500 this year for tax computation.

Also I am not sure how do I convince IT dept (if needed), because the Bank interest certificate shows Interest Paid Rs. 7000 and TDS deducted of Rs. 350 for FY-17-18.
Request you to answer my query as early as possible.. Thank You.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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07 May 2018 You have to show interest Rs 3500/ in your income (7000-3500 already shown). You can claim Rs 350/ as prepaid tax. The AOs are learned and have experience of TDS irregularities in the Banking System.
You need not to take pain, just explain (if needed), definitely, the AO will be convinced.

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