24 July 2008
Please clearify about scheme whether it is NSS 1987 and 1992.
National Savings Scheme, 1987, was covered by Sec. 80CCB, which allowed the contribution as deduction from taxable income subject to the amount of both principal and interest being taxable on withdrawal. This scheme was closed with effect from April 1, 1992.
National Savings Scheme, 1992, allows deduction for the contribution made for this purpose under Sec. 80C subject to the ceiling under Sec. 80C with interest income being taxable, while the principal amount on return will not be so taxable.
Interest under this scheme can be offered either on accrual basis from year to year or on cash basis in the year of withdrawal.