deduction under section 80C
This query is : Resolved
VINAYAK D PRABHU
(Querist)
12 January 2009
WHETHER MATURITY PROCEEDS FROM INVESTMENTS IN NATIONAL SAVINGS CERTIFICATE TAXABLE?
12 January 2009
Principal is tax free.Interest is taxable either in the year of maturity or in the respective years of deposit.
K V Subba Rao
(Expert)
13 January 2009
Interest accrued on NSCs is subject to tax on accrual basis (except in last year)
This is advantageous especially because althouth interest accrued amount is addded to Income, one can claim like amount as Deduction u/s 80C. In effect, there is no tax except in case of assessees who can afford to save in approved media upto the maximum extent by investing in LIC, PPF and ELSS etc
If interest is subjected to tax, maturity proceeds of NSCs is exempt (except last year's interest which has to be returned in the year of maturity)
This is advantageous especially because althouth interest accrued amount is addded to Income, one can claim like amount as Deduction u/s 80C. In effect, there is no tax except in case of assessees who can afford to save in approved media upto the maximum extent by investing in LIC, PPF and ELSS etc
If interest is subjected to tax, maturity proceeds of NSCs is exempt (except last year's interest which has to be returned in the year of maturity)
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