Dear Sir, invested Rs 20000 in long term infrastructure bonds in the year 2011 for a period of 10 years under cumulative option. The bonds matured in Dec 2021 and I received Rs 44,624 after deduction of TDS of Rs 2,736. An amount of Rs 27,360 is being shown in my AIS as income from other sources.
I have been showing the interest accrued every year on this investment in my IT return for the past 10 years as interest income. However now this year I am again required to show the lump sum amount as income and pay tax on it since it is being reflected in my AIS and 26 AS.
IS THERE ANY WAY THAT I DON'T HAVE TO PAY DOUBLE TAX since I have already paid tax as accrued interest over past 10 years? How to reflect same while filing IT? I have filed ITR 2.
Ans: As per income tax provisions, interest income can be offered on accrual basis (i.e. interest earned but receivable at later stage) or cash basis. But once you start offering income under one method, you cannot change.
In your case, Rs 24,624 is interest earned during tenure of 10 years. If you have offered interest income every year (even if not received) for FY 21-22, you have to offer interest earned between April 1, 2021 and maturity date of December 21.
Amount offered in Income Tax Return can differ from amount appearing in AIS, if income is offered correctly as per Income Tax provisions and appropriate reply should be filed in AIS feedback option.