Sir
I made fd of rs20000 in bank for one year and was matured in 17feb 2015. I got some rs 2000 as interest but I totally forgot to withdraw the fd.in the month of feb. and I went to bank with fd receipt in the month of May 2016. Bank credited 22000 in my account.Now my question is in which financial year should I show this income of interest?
Please answer my query.My earlier query of pref shares still not answered by anyone.
Thank you
SIR
IF YOUR INTEREST CREDIT IN YOUR BANK A/C IN MAY 2016
YOU SHOULD SHOW IN FY 2016-17 AND INCOME HEAD IS (INCOME FROM OTHERS SOURIES)
GOOD LUCK
Sir, I think the Query is hypothetical because your FD is maturing Feb 2015 and you withdrawn on may 2016 .but still you got interest Rs2000/- .As per bank procrdure at the time of opening FD tge cusyomer can give option for automatic renewal means the FD gets automatically renewed after 14 days of maturity for tge period tge customer has earlier deposited.in this case it is one year .the interest income is taxed on accrual basis .you can get the information from bank how much interest is accrued fir FY 2014-15 from bank and bank gives its report tgat yiu can kerp it in yiur records
I have answered as yiur deposit is with a commercial bank
It depends on what method of accounting u are already following for recording income from other sources. If cash basis,then interest should be shown in that fy in which u got credit in your a/c ,and in case of due basis then in the year in which intt will due.
income from other sources is generally calculated on the basis of method of accounting followed by assessee if u r following mercantile system of accounting(accrual basis) then u shoud show interest income in FY 2014-15 & if u r following cash basis of accounting then it should be in FY 2016-17.In case of FDR interest is generally shown in that FY in which it has been accrued because TDS is Deducted by Bank on interest income in which it has been accured so following general principal i will suggest that please show it in FY 2014-15.
There are two methods Cash bais and Accrual Basis method. You may opt any of the method. But in your case, as interest has accrued in the year 2014-15 as well as you have also received the interest in the year 2014-15 whether you have withdrawn it or not. Hence you will have to disclose the interest income in the year 2014-15.
Sir, interest income is the income which always treated on accrual basis irrespective of the accounting method one employs
Thank you
Please ask the bank to provide interest summary for each of the years in which your fixed deposit was active and show the interest as per that interest certificate in the income-tax returns for relevant years.
In my opinion accrued interest for the respective year will have to be offered for taxation. Banks are giving Interest certificate very year for year ened 31/03. In the given case since amount is not material you can follow cash system. But when interst credited per year crosses specified limit for TDS purposes, then interest credited and Tax deducted at source gets reflected in your 26AS. Its better that accordingly( as per 26AS) assesse shows yearly accrued income as well as claims tax credit benefit available to him
According to sec 145 of Income Tax Act, Income from other sources may be computed in accordance with either cash or mercantile system of accounting. Hence, you may opt any method. But in both the cases, you will have to disclose the income in 2014-15.
I agree with the opinion of Mr.Rohit.
By accrual concept, the income of interest should be shown in the previous year i.e. in FY 2015-16.
If we choose to disclose it in the later year, the Income Tax Authority may have objection as-Why the income was not disclosed in the earlier year when it got accrued.
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