Tax on Accrued interest on FD

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  1. AKD

    AKD Member

    I have FDs in banks in cumulative mode in which I shall get the maturity after a few years.
    In the mean time interest accrues but not paid.
    What is the correct provisions of Income Tax Act?
    Am I required to include annually accrued interest in each year's income till maturity and pay tax on it?
    Or, I can defer such payment till maturity year and then pay tax on the total accumulated interest?
    Or, I can go either way?
     
  2. rudrabose

    rudrabose Active Member

    Income Tax would be required to be paid on Accrued basis every year.

    Deferring the Tax Payment till Maturity is not the correct method.
     
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