Thank you.  But I have not shown full interest in earlier ITR. My total NSC interest 23717 shows in ais . I have shown in this year ITR. Tax liability shows rs almost 13000 and interest. I have filled it.  Now can I revise old two years returns revise if yes i have to pay any penalty or late fee. What was the procedure.

Thank you for your valuable reply. 

If we have not declared interest in first year NSC and neither claimed it in 80C, can we start doing this from the 2nd year of nsc, that is declaring 2nd year interest and claiming in 80C and continue...?Or if we have missed out doing above declaration+deduction for first year then are we not supposed to start from 2nd year?

SECONDLY my worry is suppose we declare each year like this but post office declares the lumpsum 5 yr interest in the last year in AIS/TIS sft section, then it would become double declaration of interest income(for 1st 4 years) for us? Because our int income in ITR should match AIS else if we show only 5th year interest then IT might send mismatch.
Pls guide and clarify both these points.
Note: MY taxable income is nil that is I do not fall in taxable bracket in any year so no tax liability- as unemployed.

1st Q- I think you need to amend your return and include 1st year interest and refile return.

2. I am sure about this as I had this issue last year. In AIS you have an feedback option of "income belong to other person/year.

So as you allocate interest to previous 4 FY... current year interest will show only the 5th year interest. I filed it and had no problem of mismatch.

If you don't provide feedback on your AIS before you file your return, then you might have mismatch problem 

My return is already processed in Aug 22, is it needed to revise the processed return- I have never done that and don't know the procedure or consequence. 

My income is not in taxable bracket.. so is this inconvenience worth it? Because even if i had declared interest i will not be able to claim this interest in 80C as already have invested limit. And Even if i don't claim in 80c it will not be taxable. So can I not start from 2nd year nsc interest?

In your case, you are sure about what? Did po show lumpsum 5 yr interest paid in AIS for you means for year FY21-22? Even if you gave feedback first by I think spliting the 5yr interest in 5 rows then, did it get accepted, (derived value replaced to reflect only 5th yr interest) "BEFORE" you filed the return? 

How long it took for your feedback to be implemented, replace lumpsum 5yrint with the 5th yr interest?

1. If you don't owe taxes even after including 1st year nsc interest, then just leave it as-is and don't do anything with that return.

2. Yes, I split it in 5 rows

Year1, year2, year3, year4, remaining will automatically show up as current year 

Then once I submit the feedback the derived value just show 5th year interest only. I think this process is automated and is processed immediately or it might take 24 hrs to show up.

Be careful when filing ITR as system will auto fill the original value(5 year total lumpsum). So manually change this in your ITR to derived value.

I actually asked post office why they report it on cash basis and not accrual basis like banks...

They just gave me a stupid response that post office comes under finance ministry and banks under RBI..so they don't have to follow the rules that banks have.

In NSC it is confusing to calculate when investment is made in mid FY on a random date, suppose we have invested Rs100000 on 28th July 2021 then 1st year nsc Rs6800 is actually from 28th July 2021 to 28th July 2022, so what is right way of declaring 1st yr 2nd yr 3rd yr 4th yr and 5th yr interest?

 1) Should we declare full 1st yr nsc interest Rs6800 in ITR for FY22-23( is FY right?) 

Or 2) should we split 12mon int Rs6800 amount, so as to declare 8mon int(FY 21-22 28th July 2021 to 31st Mar 2022) and 4mon in next (FY22-23 1st APR 22 to 28th July 2022)?

On other hand we say 1st yr 12mn NSC int is reinvested in 2nd Fyear and show this in 2nd Fyear- while filing ITR, whereas if we go by dates, it's only 8 mns int accrued falling under FY21-22, so are we supposed to declare 8mns interest income and deduction of the same amt in 80C and remaining 4mon & it's deduction int FY22-23? 

Pls clarify this confusion..of how it should be interpreted and declared.

Pls carefully read my example as I have never declared yearly interest..it's imp to understand the above, that's why gave eg.. Pls see FYs. Kindly reply

Based on the reply in this CA forum, I will get to know if I have not declared 1st year NSC in FY21-22 or I am supposed to declare 1st year NSC in ITR return for FY22-23(which means I had not missed out in the first place!)

Actually for the last 6 years, I have been following option 1. (Declare 1st year interest 6800 in fy 22-23. So you have not missed anything in your last year's return.

My CA mentioned both options are correct and allowed but follow the same option for all NSCs. 

Let me tell you one thing that PO does it differently than banks.

Eg. Let's say you invested 100000 in PO 5 year TD in July 2021(yearly interest payout). The first interest payment of 6800 will be credited to your account in July 2022. So PO reports the entire 6800 in your AIS in FY 22-23 and nothing in FY 21-22. 

So Post office AIS reports follow option 1 and banks AIS reports follow option 2.

So I just have been following option 1.

Actually I think when you are saying

"My CA mentioned both options are correct and allowed but follow the same option for all NSCs. Let me tell you one thing that PO does it differently than banks."

Was not querying to choose between interest paid or interest accrued. It was withing PO interest accrued option, the correct way to declare.. 

It's getting mixed up..here probably your CA was saying either declare NSC interest directly on maturity when PO actually pays interest OR declare yearly interest accrued.  Right? 

But my above query was if we consider- the yearly interest accrued, how should we consider it calculate this yearly accrued interest.

1) Should we declare full 1st yr nsc interest Rs6800 in ITR for FY22-23( is FY right?) Or 2) should we split 12mon int Rs6800 amount, so as to declare 8mon int(FY 21-22 28th July 2021 to 31st Mar 2022) and 4mon in next (FY22-23 1st APR 22 to 28th July 2022)?

Do not ignore the fact that in both options I am talking of interest accrual declaration.

The example which you are given for PO 5yr TD is different...Bcoz there the interest is getting paid annually...which if you want to compare in terms of NSC, the scenario should be compared with interest paid at end of 5 years.

The clarification I was asking is if you are considering yearly interest accrual...how is it declared in terms of FY. you are considering option 1)(int accrued at end of 1yr) or 2)(split across 2 FYs) ? and note in both cases interest is not paid...

Hope you got my point..has your CA advised you in this regard as to which is correct way to declare int accrued amt in ITR FY? Now tell me, from the above, which option was advised to you and followed by you?

So within PO if it's TD, you declare it in FY, when "interest is paid" annually and if it's NSC, you are declaring in FY, when the 1year "interest is accrued" (at the end of 1 yr)?  It's like following 2 different ways within PO

Am I right? Is that what you said you do in case of PO?

In banks, the interest certificate for FY shows interest accrued/paid both types of interest included.. So how you declare in banks- whatever they show in interest certificate?

Ganesh, awaiting your inputs on my last comment. Pls do reply...

And I would appreciate if others & CAs(as it's CAclub) too read my comments and give any inputs/ advice as to what they have been doing.

Please CAs and others reply to my concern