FD interest and IT Return

This discussion clarifies how to handle Fixed Deposit (FD) interest that appears on your AIS (Annual Information Statement) but hasn't been credited to your account yet. Banks report interest on an accrual basis, meaning it's considered income for the financial year it's earned, even if not yet paid out. You must declare this accrued interest in your Income Tax Return (ITR) under 'income from other sources'. It's advisable to obtain an interest certificate from your bank to accurately report this income. The full accrued interest will be accounted for when the FD matures and the total amount is credited.