Interest on cumulative deposit schemes of private sector undertakings-Taxability-Regarding - Income Tax - 409/1985

Interest on cumulative deposit schemes of private sector undertakings-Taxability-Regarding Circular No. 409 Dated 12/2/1985 The issue regarding taxability of interest on cumulative deposit schemes of the private sector undertakings has been considered by the Board. The point for consideration is whether interest on cumulative deposit schemes 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 interest on cumulative deposit schemes of private sector undertakings should be taxed on accrual basis annually. 3. The private sector undertakings will intimate the individual depositors about the accrued interest so as to enable them to disclose it in their returns of income filed before the income-tax authorities. (Sd.) P. Saxena Secretary, Central Board of Direct Taxes.