Taxation on accrued interest
This query is : Resolved
26 June 2024
In case an FD spans over more than one financial year, then the accrued interest at the end of the first financial year is added in income as accrued interest and TDS is deducted. In the next financial year, the interest is paid, so the interest received is added in this year, meaning that the amount equal to the accrued interest is taxed twice. Is it that the banks will show the interest paid in current year after deduction of the accrued interest in the last year? ls this the practice adopted by the banks or they add complete interest paid as income for the current year?
27 June 2024
For TDS deduction they calculate only the interest accrued/paid (earned in the same year) in the relevant FY. Even though they declare interest paid in the FY in aggregate of earlier years also.
27 June 2024
Tks Mr Rambhia. However, there is one confusion.
According to you, the bank will declare interest paid in the FY in aggregate of earlier years also which means that the income for the current year will increase, though TDS will not be double. But when I file my IT return, I will consider the interest declared by the Bank and this will inflate my income and I will be calculating higher tax payable for the current year. This actually is my point, not the amount of TDS the Bank deducts.
According to you, the bank will declare interest paid in the FY in aggregate of earlier years also which means that the income for the current year will increase, though TDS will not be double. But when I file my IT return, I will consider the interest declared by the Bank and this will inflate my income and I will be calculating higher tax payable for the current year. This actually is my point, not the amount of TDS the Bank deducts.
27 June 2024
No.
Check form 26AS, there the interest & TDS data will be only for current year. Take that data for ITR filing. Your TIS/AIS data will be also for current assessment year.
Check form 26AS, there the interest & TDS data will be only for current year. Take that data for ITR filing. Your TIS/AIS data will be also for current assessment year.
29 August 2024
Good Luck.
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