4] Since the interest on this REC bond is payable only once every-year (in June), I feel that during the subsequent years, starting from FY 2022-23, I would require to pay the regular tax (as per applicable slab) on Interest income of these bonds [received in June every year] till the maturity of the bonds (60 months lock-in). 

Ans: Not applicable as mentioned

Ans: Yes, if you use it to save tax on an eligible asset.

Ans: Yes, this is right from ITR point of view as you are accounting for it on a receipt basis.

Ans: Interest income is taxable as Income from other sources and not as capital gain. It can be offered to tax on receipt basis or on accrual basis. Once either of the method is adopted, it should not be changed in subsequent year.

Ans: The income tax in India is paid on accrual or receipt basis whichever is earlier. In case of 1 and 2 you rightly pointed out that since they are received you will pay taxes. As far as FD is concerned, the interest is taxed on accrual basis every year on which TDS is deducted. Hence, every year you will need to show the respective interest in your income tax returns and at maturity only differential interest will be paid.

For eg. FD of INR 100 @10% is made for 3 years then year 1 on 10 rs you will be pay tax. In year 2 you will be tax on 11 rs and year 3 you will tax on 12 rs and upon maturity there will be no taxes since entire interest is paid in the respective years.

Hope I am able to articulate this properly.