13 July 2007
Mr. A is a retired person from gujarat govt. He has invested in Senior Citizens saving scheme. He receives interest for the same on the last day of every quarter. Now for the last quarter of Jan 2007 to March 2007 he has received interest on 4th April 2007. Also no TDS has been deducted by the bank during the year April 2006 to March 2007. The bank has deducted the TDS on 30th April for the whole year. The Form 16A issued also shows that interest is paid on 4th April 2007 for the period (1-4-2006 to 31-3-2007). Now how will the tax calculation of Mr. A be done. Will the income be considered for the previous year 2007-08?
13 July 2007
It appears that the TDS certificate is issued for the Asst. Year 2007-08 and the amount of tds for the last qtr. is included in the certificate. If so, it would be better to treat the interest as income for the asst. year 2007-08.
An indivisual can follow either the cash system or marcantile system of accounting for income tax purpose. Income can be treated for either of the two previous years, ie. 2006-07 or 2007-08.
It is advisable to treat the income in line with the certificate.
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