RECEIPT OF INTEREST ON DEBENTURES, Income Tax

[S.C. WADHWA]

A company made an investment in debentures on which interest is received after deduction of tds.

Interest is received for period from 01/01/12 to 31/03/12 but same is received on 05/06/12.

Now, I want to know whether same should be accounted on receipt basis in financial year 2012-13 or same should be booked first on mercantile basis in financial year 2011-12 and then book receipt of interest recoverable in financial year 2012-13.

Posts / Replies

[Naresh Rinwa]

It has to be booked as per mercantile basis and it should be shown as interest receivable. and compute the income tax accordingly.