Tax Treatment on FD Interest

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Vineet (Querist)
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15 April 2011 Hi,

I have made following investments in FD:

1. Rs 12500 @ 9% for 50 days on Mar 9, 2011
2. Rs 30000 @ 10.25% for 555 days on Mar 24, 2011
3. Rs 27000 @ 10.34% for 5 years on Mar 24, 2011 (Company FD with Interest on Maturity)

Since these FD's are with different institutions and different periods, there would be no TDS made. I would like what will be the tax treatment in my hand on the interest and how would I show them in ITR for each FY?

Thanks for all your help!

Regards,
Vineet

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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15 April 2011 Interest on FD has to be offered and to be assessed under the head"income from other sources'. The depositor has the option to declare the income on cash basis or accrual basis as per section 145(1) of the Income tax Act,1961.

Vineet

Vineet (Querist)
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15 April 2011 Thanks sir for your instant reply. Just one question. Since the investments have been made with different institutions, so if I would like to declare interest on accrual basis, would I need to calculate the interest for each year and then declare or would the same be provided by the respective institution.

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CA. Krishna K Neeraj

CA. Krishna K Neeraj (Expert)
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19 April 2011 You should calculate interst on different FD on cash basis as well as accrual basis. Then you should opt for the best option which is most beneficial to you