I have couple of FDRs (Fixed deposits) with State Bank of India, which are auto-renewed every year.
As per their interest certificates,
(a) For FY18-19, Interest Paid = 10040 and Interest Accrued = 9555, Total Interest = 19595, TDS Applied = 1960 (10% since interest amount crossed then threshold of Rs. 10000).
(b) For FY19-20, Interest Paid = 10007 and Interest Accrued = 11363, Total Interest = 21370. They did not deduct TDS this year as interest threshold is now raised to Rs. 40000. Hence they neither issued Form 16A nor reported interest in Form 26AS either.
However, now I have to include the interest amount in my Tax calculations.
My questions are;
1. For Tax computation purpose, Which amount I need to consider i.e. Interest Paid OR Interest Accrued OR Total of both (Paid+Accrued)?
2. If I have to pay tax on Total of both interests, note that SBI has already deducted tax on Amount Accrued for FY18-19 last year, So do I need to pay tax again (double taxation?) when it is paid this year for FY18-19? OR
3. Shall I Compute interest as (Interest Accrued for FY19-20 + Interest Paid for FY19-20 - Interest Accrued for FY18-19).
Appreciate your repose as soon as possible.
CAclubindia
