interesr on deposit
Abhinav Jain (141 Points)
28 June 2019
is tax is payable on accrued interest or only on interest credited
Abhinav Jain (141 Points)
28 June 2019
prasad Nilugal
( GST Practitioner & Accounts )
(14215 Points)
Replied 28 June 2019
As per section 193 and 194 A of the Income tax act 1961 at time of Credit of such income to account .
please confirm with others also.
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 28 June 2019
1. Income tax act permits two types of methods for accounting income. One is the Cash System and the other is the Mercantile (accrual) type of accounting.
2. Now assessee's are allowed to show account their income based on whichever the method convenient for them. In most of the cases, the Mercantile system of accounting seems logical for people running businesses. In case of Individual, they would like to pay taxes at the time of receipt of income. Though it depends on individuals convenience. But there must be consistency in following either of the methods.
3. If you follow the cash system, only at the time of receipt of interest from the bank it will be taxable. In the case of the mencantile system, it will be taxed based on how much interest has got accrued each year.
Please correct me if the above interpretation has an alternative view.
Dipesh Jha
(PRACTICE )
(673 Points)
Replied 28 June 2019
CAclubindia
