Suppose an FD of Rs. 20000/- paid by X A/c (treated as loan)
and Maturity of Such FD Rs. 20771/- also received in X A/c
But beneficiary of such FD is Y (i.e FD in the name of Y)
Query No 1) what should be the treatment of such transaction in both books.
In X Books
1) at the time of FD
Loan to Y (FD) Dr 20000
to Bank 20000
2) at the time of maturity
Bank A/c Dr 20771
to Loan to Y (FD) 20771
3) Interest on such FD
Loan to Y (FD)....Dr 771
to KYA HOGA ?? 771
In Y Books
1) at the time of FD
FD A/c Dr 20000
to X 20000
2) At the time of Interest
FD A/c Dr 771
to Interest on FD 771
3) at the time of Maturity
X A/c Dr 20771
to FD A/c 20771
query No 2) Interest on these FD is taxable in the hands of X or Y.
CAclubindia
