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Tds on fd - query

Disha Vaidya (Sr Manager) (40 Points)

26 July 2013

Hi,

I have some fixed deposits under cumulative option and since the interest amount for the year is less than 10K, bank has not deducted any TDS. I have not shown such interest under my income from other sources and plan the show the entire amount in the year of maturity. Is this correct?

thanks,

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4 Replies

Ankit (CA, CS) (3064 Points)
Replied 26 July 2013

Disha,

even though the interest was not actually credited to your bank account, you need to show the same as income in the current year itself. ideally the treatment that you are suggesting is not correct.

because, there are times when the companies report the cases with nil TDS.

also, in the year of maturity, when you will show the full amount, the same will not match with the one refleting in your form 26AS. since at that time the interest will be shown only for that year in the form 26AS

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sanjay singhal (CA) (987 Points)
Replied 26 July 2013

In case of FD interest is credited on period to period basis and paid on maturity. You have to show it as income on year to year basis. there is no connection whether TDS deducted or not.

Mihir Doshi (B.Com, CA, CS, LLB) (2187 Points)
Replied 26 July 2013

Disha,

There are two different schools of thought. It may be shown on maturity or it is based on accrual principle.

You can show interest income either on receipt basis or on accrual basis but whatever method you follow, you should follow it consistently. Now what would be the difference if you show the income on accrual basis??

Mihir (Wealth Manager) (5293 Points)
Replied 26 July 2013

The bank will issue interest statement/certificate showing interest credited for the financial year. You can use that certificate to show your interest in your ITR.