Can FDR interest be taxed on cash basis ?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2010 An assesse is a non-resident having income from other sources since November 2007. His year wise accrued FDS interest income (approximate) is as follows :-

Previous Year Income
31.3.2008 Rs.8,50,000
31.3.2009 Rs.24,40,000
31.3.2010 Rs.4,06,000

Returns for the years ending 31.3.08 and 31.3.09 have not been filed. If the same are filed today then there is a fear of levy of penalty and also prosecution TDS has been deducted by the bank @ 10%+ surcharge.

Can the returns be filed and penal provisions be avoided by any legal manner?

Is the assessee entitled to concessional tax treatment of senior citizen ?

Will TDS deducted by the bank on interest treated as income of the year of deduction and claimed in the respective years or TDS be claimed in the year when income is offered in toto in the year of maturity on cash basis ?

deepak K Gujrati

deepak K Gujrati (Expert)
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25 June 2010 For Previous year ending on 31-3-2009 and 31-3-2010 I Tax Return can be filed in normal way. Interest if any for tax due has to be paid. Interest for late filing of Return for AY 2009-10 will also be required to be paid. There is a provision for penalty u/s 271 f by a a sum of Rs 5000/-. But this is generally not pressed. This is not to be paid suo moto. Return for AY 2010-11 is still due. So there no question of any penalty.

As regards for AY 2008-09, it is safer to workout the tax liability after giving effect of TDS. If any tax is due it should be paid. As regards Return, it cab be submitted if any Notice is received.

TDS cliam wiil be allowed on year basis when income is offered for taxation

I think senior citizen benefit will be available to the assessee.