som kansal (chartered accountant) (307 Points)
01 August 2008in the case of a FD of 3 years
whether the interest for the 1st year shall be considered as income from other sources while calculating the income of the assessee..
this is so asked because the interes is not actually credited to the assessee's account bu TDs has been deducted.
pls help as soon as possible
CA Nitin Wadhwani
(Chartered Accountant)
(4469 Points)
Replied 01 August 2008
Yes
Taxable As Accrued Income.
Pratik K
(Student)
(3406 Points)
Replied 02 August 2008
but if in the case where later on the Fd is withdrawn before the due date i.e before the 3 yrs then interest rate will be 1 or 2% lower than aggreed.
what should be the treatment then?
CA Nitin Wadhwani
(Chartered Accountant)
(4469 Points)
Replied 02 August 2008
Suppose u Have FD of 5 lacs for three years interest comes to 40000/-, 45000/- and 50000/- (say)
u have filed returned for first and second year and taxed 40 and 50k
then if in the third year year if withdram the amt then interest to be taxed =
Interest Receieved on Withdrawl-Interest Already Taxed(90000/- in this Case)
M.Sriram Shenoy
(CA Final)
(814 Points)
Replied 02 August 2008
Interest on FD can be offered on accrual basis during the fixed term. In my opinion,If the FD is withdrawn before the fixed term and the interest received is lower than the interest offered as income in the IT return, then the excess interest offered as income during the earlier years cannot be taken back. Tax paid on it is "paid".
Darshu
(CA)
(1580 Points)
Replied 02 August 2008
Yes the Interest is considered under the head Income from other sources........
Devendra Goyal
(Service)
(24 Points)
Replied 02 August 2008
Dear
Som Kansal
FD Interest is Taxable on due basis is correct. Mr. Shriram Shenoy's Argument is also correct. Once the Tax on Interest is Paid then it is paid, Because there is no any Provision in Income Tax Act that Income of Head Income From other Sources can be Negative.
Regards,
C.A.Devendra Goyal
.
som kansal
(chartered accountant)
(307 Points)
Replied 03 August 2008
A VERY BIG THANKS GOES TO ALL OF U FOR SUCH A GREAT EFFORT DONE BY U FOR ME
THANKS A LOT FOR SUCH AN USEFUL INFORMATION
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