My age is 55 years and salaried employee. I have invested Rs 1.00 Cr in Fixed Deposit with Nationalised Bank for Five Years. The Fixed Deposit proceeds along with Interest will be received on completion of 5 years. How ever bank is deducting TDS @ 10% on the interest credited to my Fixed Deposit on annual basis. In the first year, the bank deducted TDS Rs 1.00 lakh on interest of Rs 10 lakhs credited to my fixed deposit account.
Here my query is - How do I report my interest income in my Income Tax Return and claim TDS deducted by Bank.
Should I report the interest annual basis and pay taxes every year though I have not received interest physically to my bank account or can report the interest income when I receive the Fixed Deposit proceeds along with interest on maturity of 5 years.
If I have to report interest income on annual basis and pay taxes, the tax would be around 3 lakhs on interest income of Rs 10 lakhs, claiming Rs 1 lakh TDS and pay balance tax Rs 2 lakhs. I do not have any surplus funds to pay the balance tax Rs 2 lakhs every year for first four years. Should I have to borrow the funds to pay taxes.
Suppose If I can report the interest income on maturity of 5 years and pay taxes, can I calim total TDS deducted by bank in 5th year what ever deducted by bank for the first four years Rs 4 lakhs.
Can any one advise the exact legal position.
Thanks & Regards
Anjaneyulu S
CAclubindia
