Tax on accrued (but not received) interest on ifci bonds

Tax queries 563 views 4 replies

Dear All;

My question is related to when tax to be paid on accrued interest (but not received) on IFCI bonds. Details are as follows:

1. I have purchased IFCI Bonds with an option of cumulative interest (which gets compounded annually).

2. I have not received any interest this FY. Also, I have not sold these bonds.

3. However, I have received a letter from IFCI, which says that "XX" amount of interest has been accrued.

Therefore my questions are:

1. Do I need to consider this as an Income for FY 2018-19 and pay tax this year? or

2. Can I defer payment of tax until the bonds are sold and pay long term capital gain (which gives me indexation benefit, and lower tax burden)?

Please guide. Thanks.

S. Kumar

Replies (4)
1. yes, it is taxable on accrued basis
2. no you can't defer payment of tax
Agree with Mr. Imran

Thank you very much.

TDS on Interest income is deducted under section 194A on accrual basis.You should check this in your form 26As. Accrued intererst and tds deducted on it must be appearing in your 26AS for FY 2018-19. If bank credit accrued interest at the end of the FY then it will be credited as on 31.3.2018 and you should check your form 26AS after 1.4.2019. you have to show this interest income under other sources. 

CA umesh kumar- 9717597230


CCI Pro

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