How is interest income from KVPs taxed?

Section 145 of the Income-tax Act, 1961 provides for taxation of income from other sources (like interest) in accordance with either cash or mercantile system of accounting regularly employed by the assessee. Where to report KVP interest income which was offered to tax in the previous years' ITR (as such Income cannot be reported as a deduction u/s 57 nor can it be declared as exempt income u/s 10 of the Act)