Interest Accrual on Last Day of Previous Year for Tax Purposes Under Mercantile Accounting System Explained.

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....Accrual of interest - Non recognising interest against the advance - assessee is a company and following mercantile assessment of accounting - the interest accrues and arises as on the last day of the previous year in which the assessee’s accounts are closed. Once the interest is accrued, it has to be charged to tax.....