New India Coop Bank Frozen Account

The DICGC insures deposits up to Rs. 5 lakhs. If the bank fails, deposits upto this amount are protected.

The bank has requested the submission of this form, likely due to the ongoing merger talks.You should fill out the form accurately and submit it as per the bank's instructions.

Interest and Tax implications:

The note mentions that the account has been credited with interest , and there's a discussion about the tax implications based on whether the merger happens or not. It's essential to report the interest income correctly to avoid any tax-related issues.

Merger Outcome:-

If the merger doesnot happen and the bank fails, the DICGC coverage will apply to the principal amount of the fixed deposit.

You may  considering the tax implications of the interest income.

Let me rephrase

I have no access to the account as it is frozen for all account holders of the bank.  The bank did not entertain my request to have the FD Interest credited to another account. The credit of fd interest appears simply a book entry.

I will not get this interest nor my balance funds in savings account if the merger fails and bank shuts down and will basically claim only the principal amount of 5L which is the maxmimum limit under DICGC.  At that time this becomes a dead loss and I cannot adjust against any income. Also I am at a loss of finding a solution on tax paid on declared interest, I never receive in the above event.

I am exploring option of differing payment of interest by filing Feeback on Compliance Portal AIS with option Partly Agree and differ this amout to current financial year.

I hope that this issue will be resolved in this financial year and god willing the merger happens.  So technically the Interest will br realized by me in the current financial year and its only fair to report the income and pay tax in the current financial year.

Does this line of reasoning make sense.