Interest accreition to corpus fund - accounting and tds treatment

Dear Sir,

Please let us know whether the notional interest you are taking into account is on realisation basis in future or based on bank rate ?

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Interest rate is fixed, also we are giving balance confirmation to committee of residents corpus fund + accrured interest minus expenses incurred....every quarter....

Whether Statutory auditor is right in considering this interest amount as contingent liability in audited financials....

It is not a contingent liability since liability is determined and fixed that you are giving balance confirmation.

Further contingent liability is always a noted to accounts. Once you account your liability in your books of accounts, the nature of contingent liability is goes away.

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