An assessee being an professional maintains its accounts on cash basis. The assessee receives interest on bank FD on which bank has deducted the TDS. Now whether the assessee should claim the TDS on receipt basis or on accrual basis.
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Tds deducted in respect of income received by professional
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accrual basis
The bank will issue a TDS certificate in this connection consisting all details like - Sum deposited, Rate of Intt., TDS deducted, Time period and all. This interest to the assessee is as receipt because bank has credited the interest to assessee's FD A/c. So this interest has been received to Assessee in form of credit to FD A/c. So assessee have to pass the entry for this interest receipt in his accounts. It will be treated as receipt basis accounting.
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