Hi Sir/mam,
I am salaried person,
In 2018, to save tax, i started the normal FD from bank website of ₹ 45000 for 2 Years. And I also took the rebate under section 80 C that year. I know, I did mistake. But now, this FD is redeemed in FY 20-21. I want to know where can i show this redeemed amount during filing the ITR. I also received the Interest on FD from last two years.
Hey @ankitpunia ,
So, the redeemed amount of normal FD is not to be shown anywhere in the Return of FY 20-21. The Interest income earned during FY 20-21 is to be shown under the head income from other sources as Interest Income.
Sir, if any one can clarify regarding terms - interest accrual & interest paid in a financial year in the bank statements for Fixed deposits.
And what has to be reflected while filing IT returns out of these two? accrual interest or interest paid.
Regards
Hey, interest accrued is the actual interest that is due to you while the interest paid is the actual received.
When it comes to taxability purpose or while reporting it in ITR, interest accrued must be considered
the interest accrued in a particular year will be paid to us in the year when the FD matures and we will pay the tax again on that amount. So, how to avoid this redundant taxation?
If the deposit interest accrued in a particular year is taken as income for paying tax in that particular year, wouldn’t we pay tax twice i.e. when the interest is actually paid to us by the bank?
Hey, based on accrual concept if you have already paid tax for the interest accrued, you do not need to include that again as income when you receive the same.
Hope this helps