Interest on saving account for project where loan AMT is credited

We received JICA loan for mthl project. They give loan amount to us in saving bank of india as per their condition. On this saving account we received interest how it is treated. Whether to be netted of from cost of project or to be shown as a income?
Replies (9)
Quick Summary
This discussion explores how to treat interest earned on loan amounts credited to a savings account for a project. The consensus leans towards treating this interest as 'income from other sources' rather than netting it off against project costs. However, it's also suggested to consider accounting standards like Ind AS or AS 16 for borrowing costs, which might allow capitalisation of interest as a project cost while the project is ongoing.

Other income
Income from other sources
Pls explain me , as per accounting standarad

When you keep money in saving account 

Bank paid you interest on that money which you kept in their bank in saving account 

It is calculated in daily basis and credited to you at the end or middle of the each quarter or half of the year 

Income earned from the interest from saving account is known as or treated as income from other sources 

And it is deducted  upto 10000 under 80TTA  and the excess is taxable 

Hence it is a savings account and loan amount is credited your bank is giving you interest as per the amount you have in your savings account . Interest credit will be treated as income from other sources 

Interest debited is treated as interest payments towards loans 

I think this type of loan have moratorium period of 10 years.

Use borrowing costs standard for both IndAS and AS 16 which ever standard your following becuz you can capitalise the costs as long as the project is ongoing and expense when there is a halt in the project. Also check if the scope is allowing your project costs to be capitalised.

Agree with yasaswi gomes ji 

And I think it will allowing  for capitalised

We are capitalising all expenses of project to balance sheet under work in progress

It's ok  as work is still going on not yet finished

Yes forgot Tom mention

loan is always credited 

bank a/c

To Loan

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