FDR interest

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If we have not taken investment in fixed deposit in balance sheet..what should be the treatment of interst
income from FDR which is being shown in Form 26AS in which Tds has been deducted??
Replies (3)
Interest income from Fixed Deposits is fully taxable.You are required to show that income under head Income from other sources in your ITR. You can take credit of TDS deducted.
Thanks Sagar Ji..I would like to know the treatment in balance sheet as well

Interest income from Fixed Deposits is taxable and has to be shown under the head Income from Other Sources. If the Assessee is an individual and had not shown the FD in his balance sheet then you can do two things. 

1. Increase the Capital and FD:
                  FD A/c Dr
                          To Capital A/c
        (Being FD was bought into the books of accounts in current year)

2. Show the interest income in the capital account only:
                 Bank A/c              Dr
                          To Capital A/c
             (Being FD interest received)

I recommend the second entry...


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