Long Term FD - Accrual or Actual Basis in ITR? Plz suggest

sk_1122 (NA) (159 Points)

02 January 2011  

Hi All,

In case of long term Fixed Deposits (say 3-4 yrs), which is a better option - Showing Interest earned in ITR on Actual Basis or Accrual Basis?

I understand that either one of the modes should be followed consistently. 

Now, in case of Accrual basis - Suppose there is a 2 yr FD at 8% interest P.A. And if I show it on accrual basis in ITR for the first yr and during the second yr I make a premature withdrawal due to which the interest becomes say 7% P.A. How will the the already filed interest amount in ITR be managed then? Just asking this for knowledge!? :)