Avoid Yearly Accrued Interest and Pay on Maturity

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Individual
56 Points Posted on 20 June 2023

I have invested in the Post Office Scheme of Kisan Vikas Patra and NSC with a maturity of 10 years and 5 years, respectively. T

My CA says that I have to pay tax yearly on accrued interest as it gets reflected automatically in portal (something like that) I want to avoid that as I'm in higher slabs.

I want to pay tax on maturity after 5 and 10 years. 

Is this possible, and what is the way to do that?

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On 20 June 2023 at 19:09 Report
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Quick Summary
This discussion explores the tax treatment of interest earned on Post Office schemes like Kisan Vikas Patra (KVP) and National Savings Certificates (NSC). The original poster wants to avoid paying tax yearly on accrued interest for KVP and NSC investments, preferring to pay the tax only upon maturity, especially as they are in higher tax brackets. While the general practice and CA's advice suggest yearly taxation on accrued interest, some users suggest that NSC interest might be credited and taxed at maturity. The thread also touches upon discrepancies in AIS (Annual Information Statement) reporting and feedback mechanisms for correcting tax information.

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2487 Points Posted on 20 June 2023
Generally, there is a table to calculate int on NSC ( yearly intrest) and that int to be added in that FY
as per post office...NSC int for all 5 yrs will be credited just 12 hrs before maturity date and u will recive sms for that
as int is paid on maturity date....that int amt for collective 5 yrs will be reflected in AIS in maturity year only
Now,
we have option to either pay total tax on total int at maturity
or
generally, practice is to pay tax on int yearly as calculated in NSC int chart
both ways are OK
KVP is generally taxed on accural basis
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On 20 June 2023 at 19:31
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Individual
56 Points Posted on 21 June 2023

When I checked my AIS form, I see that the details of my Post Office Savings Account & Time Deposit were there. But KVP and NSC-related details were not present.

In such a case, can I pay tax on the total interest of KVP and NSC whenever the policy matures?

Is there a rule where we have to pay tax for KVP on accrual basis and NSC on maturity?

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On 21 June 2023 at 13:54
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Senior Manager
24 Points Posted on 23 July 2024

Dear Sir ,

I had a KVP which got matured in 2023-24 and I received 2 lakhs interest in approx. 10 years. I have always reported accrued interest while filing all previous ITRs.

I have also raised the feedback in AIS but selected the option of "Information relates to other PAN/ Year" and included KVP interest for each FY starting from 2016-17 to 2023-24. However, they rejected the feedback "POSTMASTER gave feedback that "ASSESSE FEEDBACK IS INCORRECT"

In this situation, what i should do?

Has anyone gone through this process

Kindly contact pramiz @ gmail.com

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On 23 July 2024 at 14:07

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