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Whether income or not

Srividya Murali (Article Assisstant) (211 Points)

06 April 2016

Hello All,

Please help me on this:

In case of maturity of Cumulative deposits, whether the maturity amount as a whole is treated as income or only the interest portion is treated as income?

Thanks in advance.

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7 Replies

Chinnu Raj (CA Final Student B.Com) (1067 Points)
Replied 06 April 2016

Only interest amount..

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U S Sharma (glidor@gmail.com) (21063 Points)
Replied 06 April 2016

principal is deemed to have been tax paid, from the bank view

Nitin Chordiya (CA final Student) (264 Points)
Replied 06 April 2016

only interest amount will be taxable

Sandeep Sankaran (Chartered Accountant) (128 Points)
Replied 06 April 2016

The interest is taxable on accrual basis. So you should offer pro rata interest to tax over the term of the deposit. For eg. If deposit amount is RS. 2 lacs and maturity amount is RS.2.5 lacs and term is 2 years, then RS. 25000 should be offered to tax in the first year and balance interest in the second year.

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manoj (student) (5205 Points)
Replied 06 April 2016

Only Interest income to be shown

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Karan kapoor (Professional) (88 Points)
Replied 07 April 2016

Only interest portion is taxable, moreover logically if principle amount is taxed it will amount to double taxation as savings and investments are pre taxed money.

1 Like