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.
Interest from Debentures: Account on Mercantile Basis for FY 2011-12, Not Receipt Basis for FY 2012-13. A company invested in debentures and received interest after TDS deduction for the period from January 1, 2012, to March 31, 2012, but the payment was received on June 5, 2012. The query seeks to determine whether the interest should be accounted for on a receipt basis in the financial year 2012-13 or on a mercantile basis in the financial year 2011-12. The response advises that it should be booked on a mercantile basis as interest receivable and income tax should be computed accordingly. (AI Summary)
TaxTMI 
TaxTMI 
