CA Atul Jiwarajka (Chartered Accountant) (210 Points)
23 November 2010
Suppose
I invest 10,00,000 in FD for 5 years on 01.04.08.
Interest is 10% p.a. simple interest.
Interest income per year = 1,00,000.
Bank credits FD with 90,000
Deduct TDS 10,000 each year.
I follow cash accounting system.
I take interest of 5,00,000 as my income in the 6th year.
How and when will i get TDS credit????
GAURAV JAIN
(C.A. F!N@L Group-1 Clear...)
(278 Points)
Replied 23 November 2010
you will claim TDS on year to year basis....
because TDS is like advance tax..
Accrued interest on F.D. (year-1)= 100000
Less: advance tax paid
(i.e. TDS deducted) = 10000
now, bank will credited interest of Rs. 90000.
GAURAV JAIN
(C.A. F!N@L Group-1 Clear...)
(278 Points)
Replied 23 November 2010
after 5 years, bank will pay you interest of Rs. 450000 (i.e. 90000*5) not of Rs. 500000
MUKESH SHARMA
(B.Com , MBA, CS*)
(108 Points)
Replied 10 March 2011
Use year to year system not follow the receipt basis..for ur Beneficial
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 10 March 2011
if u follow the cash basis then the TDS for last 4 years would lapse, u will get only TDS deduction for current year while the taxability would be on whole 5 lacs, so year wise calculation is better option,
CAclubindia
