Income Tax Query on FD

Your relative has received a tax query for AY 2022-23 regarding FD investments made in past financial years. Tax Query Validity The tax query seems invalid for the following reasons: 1. *Assessment Year (AY) Mismatch*: The query is for AY 2022-23, but the FD investments were made in past financial years. Typically, tax queries should be raised for the AY relevant to the investment year. 2. *No New Investments in AY 2022-23*: Since no new FD investments were made in AY 2022-23, it's unclear why a query is being raised for this AY. Possible Reasons for the Query 1. *Data Mismatch or Error*: There might be a data mismatch or error in the tax department's records, leading to the incorrect query. 2. *Verification of Past Investments*: Although

Your understanding is partially correct, but there is an important distinction to consider.  

Even though the Fixed Deposits (FDs) were made in past financial years, the interest earned on those FDs is taxable in the year it accrues or is credited to the account, depending on the accounting method followed (cash or accrual). The tax query for AY 2022-23 might be related to interest income from those FDs, not the principal investment itself.  

If the query is specifically about the **investment (principal amount)**, then it should be related to the **year in which the FD was created**. However, if it's about the **interest income**, then it is valid for AY 2022-23 if interest was earned during that period.  

It would be best to check the exact nature of the tax notice and clarify whether it is about **undeclared interest income** rather than the FD investment itself. If the query seems incorrect, a response can be submitted accordingly.