1)An amount has been invested in Fixed Deposit with the Bank for a period of 5-years. The Bank deducts TDS on the amount of interest ACCRUED quarterly. Quarterly TDS certificates too are issued by the bank in respect of this tax deduction.
2)This entire amount of INTEREST ACCRUED every year BUT NOT RECEIVED, would be shown as an INCOME in the 5th year, i.e. on actual receipt of Interest income.
3)The assessee maintains books on cash system.
Query:
1)Can the assessee claim every year the amount of Tax deducted (TDS) by the bank annually? OR
2)Can the assessee claim the entire amount of tax deducted annually by the bank, in the 5th year, i.e. in the year when the amount of Interest is actually received and shown in the return of income?
Assessee can claim the amount annually by showing the amount of TDS as Income as well.
Reply -2
This can be done by not claiming the amount of TDS in Schedule TDS 2 of the ITR. . But practical difficulty may arise while claiming cumulatively in the last year (from the department side).
In case the TDS claim has not been mentioned in the respective years return it is almost impossible to get the refund.
07 November 2011
1)Can the assessee claim every year the amount of Tax deducted (TDS) by the bank annually WITHOUT taking into account the corresponding INTEREST INCOME? This income would be shown in total in the year of its actual receipt since the assessee maintains books on cash system.
07 November 2011
The TDS amount has to be taken as Income as it has been received. At maturity the amount receivable will be shorter by the amount of TDS.
Thanks for your reply. Please advice whether legally it is correct to show the Interest accrued income in the 5th year i.e. in the year of actual receipt of interest(as the assessee is maintaining books on CASH SYSTEM OF ACCOUNTING. Are there any chances of the I.Tax department, invoking concealment of income provision against the assessee. What precautions should be taken to safeguard against it?
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