Interest on Cumulative deposit schemes of Government undertakings--Taxability regarding - Income Tax - 371/1983

Interest on Cumulative deposit schemes of Government undertakings--Taxability regarding Circular No. 371 Dated 21/11/1983 The issue regarding taxability of interest on cumulative deposit schemes announced by Government undertakings has been considered by the Board. The point for consideration is whether interest on cumulative deposit scheme would be taxable on accrual basis for each year during which the deposit is made or on receipt basis in the year of receiving the total interest. 2. The Central Government has decided that the interest on cumulative deposit schemes of Government undertakings should be taxed on accrual basis annually. 3. The Government undertakings will intimate the accrued interest to the depositors so as to enable them to disclose it in their returns of income filed before the I.T. authorities. (Sd.) V.B. Srinivasan, Director : Central Board of Direct Taxes.