Tax on nsc ( post office scheme) (Income Tax)

This query is : Resolved

Author : Anonymous

( Author )
24 May 2012

My query is how much amount is taxable on the maturity of NSC after 15 years ( amount reinvested after every 5 years). The amount of Rs-100000 reinvested after every 5 years becomes Rs-353610 after 15 years. So from this example how much amount is taxable after 15 years.

Thanks in advance

CA PARAS BAFNA

( Expert )
24 May 2012

NSC interest is calculated on the basis of completed years.
.
Such yearly interest is taxable.
.
However, if the assessee is follows cash system of accounting and does not account for interest, he loses the benefit U/s 80C also which remains available to him during the completed year 1 to completed year 5.
.
In this case, assuming that you have purchased NSC of Rs. 221000/- and after 6 years it has become 353000/-. So taxable amount may be taken as 132000/-.
.
In my view, as at the time of renewal you have been allotted New NSC Certificates. it can not be termed as renewal. So the Income
of Rs. 221000-100000=121000 can not be assessed at the time of Final Maturity even though such income has not been disclosed
earlier.
.

Author : Anonymous

( Author )
10 December 2012

If i want to file a return considering the interest part ,will the post office provide me some document regarding interest part or i will have to calculate manually and then file the return. And one more thing if i dont take the interest part yearly in the return then can i take the whole interest after 5 years and file the return accordingly.

Thanks in advance