Our client has received notice for discripancy in interest income. Interest income filed in return is lower than interest income appearing in 26AS. This difference is because of interest on Jointly held FDs. While filing return we offerred 50% of this joint interest income for taxation in client's return and rest 50% of income in second joint holder's return. Also we claimed 100% TDS credit in client's return and paid taxes in second joint holder's return. Since bank gives full credit of interest to first holder & accordingly deduct TDS this discripancy has flagged up. Kindly guide:
1. Is this treatment of joint interest income correct?
2. If not then how to deal with interest on jointly held FDs?
CAclubindia
