Is accrued intrest in FD added to the income for tax filling purpose?

POSTED BY Pritam Naik ON June 10, 2012 10:30 am ONE COMMENT

queries regarding fixed deposits and recurring deposits regarding taxation
If I have fixed deposit which is still not matured (It auto renews every 15 days,but interest of Rs 29 does accrues every 15 days and gets added to the main FD balance )So in this scenario will I have to add the interest accrued in the account but not paid to my annual income while filling return
In other word do we add interest accrued in the account but not paid to annual income in itr
, Do we have also have to show accrued interest in sb account while filling return regardless of it being below rs10000 . I understand that interest accrued on RD does not need to be shown in ITR and is not taxable
.
Also do we pay tax on interest accrued in PPF account (i think the answer will be no )

One reply on this article “Is accrued intrest in FD added to the income for tax filling purpose?”

  1. Dear Pritam, Just a quick look first for taxation of interest –

    PF/EPF/VPF/PPF – Tax free
    FD (Banks as well as Company) – Taxable
    RD – Taxable
    SB – was taxable but from 1.4.12 tax free up to 10000 Rs. in a FY, total from all of your accounts
    NSC – Taxable
    POMIS – Taxable
    PORD – Taxable
    Sr. Citizen Saving Scheme – Taxable

    Please ask for any other instrument I’m forgetting.

    Regarding the basic query of FD interested accrued to you (actually it’s already paid to you by increasing the base amount every 15 days), you should calculate all such accrued interest, show it in your ITR & pay taxes on this interest income.

    RD – Interest is taxable but not liable for TDS like FD so many people think like you that RD interest is tax free. No my dear friend, RD interest is taxable & you should include that as your income & pay tax accordingly.

    Thanks

    Ashal

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