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Interest on goi bond

D.P.Saraf (partner) (24 Points)

18 February 2021  

The assessee follow mercantile system of accounting. He purchased 8% government of India (Taxable) saving bonds in 2011 and showing interest every year . Bonds matured in 2017 and TDS was deducted on whole interest. AO wants to add whole interest in the year of maturity on the basis of 26AS.


 7 Replies

Online Query (CA Final Student) (120 Points)
Replied 18 February 2021

According to me
interest from bond should be treated as income for each year not on maturity

D.P.Saraf (partner) (24 Points)
Replied 18 February 2021

CAN U PLEASE PROVIDE ANY SUPPORTING EVIDENCE OR CASE LAW IN RELATING TO THE SAID  CASE.

Online Query (CA Final Student) (120 Points)
Replied 18 February 2021

Sorry, it's my perception

Kapadia Pravin (17209 Points)
Replied 18 February 2021

You show interest income as per 26AS and clain TDS accordinly. Simultaneously you claim earlier year interest (which you already offered) as Expenses under IFOS.

Josh (Manager) (124 Points)
Replied 18 February 2021

I feel the decision by ITAT Bangalore in K.  Nagendrasa  &  Ors.  v.  Dy.  CIT  has made it clear that the assessees has the right to choose the method (cash or accrual), unless the statutory provisions prescribes any other method to be followed mandatorily. There being no such mandate by the statutory authorities, assessees are entitled to recognize the interest income on RBI Bonds, either on accrual basis or on cash basis.

Sourav (Student) (23759 Points)
Replied 19 February 2021

Yes you can follow 26AS interest calculation and claim TDS accordingly

SUSHANT BIDAYE (503 Points)
Replied 20 February 2021

For income from other sources, the assessee has the choice of method of accounting .

so one can take relief under that

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