Interest on nsc

This query is : Resolved

Abhishek Roy Choudhury (Querist)
Follow

15 May 2016 Dear Sir,
An Assesse in every year receives Interest on NSC in his Savings Bank Account. So
whether this Interest on NSC in eligible for deduction u/s. 80C. As it says that NSC interest is taxable. However, as it is a cumulative scheme (e.g. interest is not paid to the investor but instead accumulates in the account), each year’s interest is considered reinvested in the NSC. Since it is deemed reinvested, it qualifies for a fresh deduction under Sec 80C.

Please tell as early as possible. I would be thankful to you.

Thanks,
Abhishek Roy Choudhury.

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
Follow

15 May 2016 Interest received is treated income accrued income and treated income from other sources, since same will be reinvested same can be treated savings falls under 80C,
In last year interest income charged taxable Under income from other sources but same is not reinvested due to maturity not eligible for deduction under 80C.

Message likes : 1 times

Rupesh Jain

Rupesh Jain (Expert)
Follow

16 May 2016 intt. on NSC is taxable under income from other sources and then intvestment u/s 80C till the maturity year. and in maturity years its consider under the income head but not take under u/s 80C, due to this maturity year of NSC.

Message likes : 1 times

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now