Accrued interest

Normaly Accounting is based on accrual basis instead of recpt basis.

On FD if interest is recvble on maturity then while accounting, you have to calculate interest of that pariculear year and you should book your income. 

Interest earned but not received (realized).

For example, bonds usually pay interest every six months, therefore interest accrues between one interest payment and the next. The buyer of a bond pays its market value plus the interest earned up to the settlement date.
 

You are liable to pay tax on your income for the F.Y. 1stApr-31stMar.  Now whatever income gets generated during the F.Y. youa re requried to pay tax on it.

In case of F.D.interest.  the interest that you actually receive during the F.Y. that is added to your taxable income.  But in cases wehre you are not receiving your F.D interest during the F.Y. but as per accrual method of accounting it is getting accrued at end of 31st Mar, then this interst is also added to your taxable income based on the method you are following for taxing itnerset.  if you are following cash basis then starightaway interset is taxable when it is recd.  however if you are following accrual method then interet is taxable when it gets accrued at the end of the eyar even if it is not actually being received.