What d accounting and taxation procedure of recurring depost

This query is : Resolved

mohit (Querist)
Follow

21 December 2011 dear sir,

My client investing Rs.6000/- per month in cash and showed properly in thier accounts..

and at last after 5 yrs. the client would recieve 4.5 lakhs

what the accounting and taxation procedure in such a case?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
Follow

22 December 2011 Monthly deposit will be recorded in the books:

RD A/c Dr.
To Cash

At the time of maturity,

Bank A/c Dr.
To RD A/c

Interest on RD a/c is taxable under the head Income from Other Sources. Maturity amount is not taxable.