Minor's income

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Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2010 I have invested in Kishan Vikas Patra for my two minor kids.The amount doubles in 8yrs 7months.Is there any interest tax liability on this every year or only on maturity?

CA Shiv

CA Shiv (Expert)
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26 April 2010 you can do on accrual or on receipt basis. its better to do on the receipt basis i.e at the time of maturity.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2010 Can I declare for some years on accrual basis and rest on maturity,depending on my income for that year.Is that possible.

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CA Shiv

CA Shiv (Expert)
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26 April 2010 No... not at all possible...you cannot change method of accounting once its done.. Either from first year, account as accrual and offer to tax or do it only at the time of maturity...

K V Subba Rao

K V Subba Rao (Expert)
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26 April 2010 "...the interest on Kisan Vikas Patra has to be necessarily shown on accrual basis . This is an exception. The CBDT circular No. 687, dated 19-8-1994..."

Source:
http://girdher.wordpress.com/2008/06/10/interest-from-kisan-viaks-patra-must-be-shown-every-year/