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deduction in respect of KVP

CA., CS. swati agarwal (Sr Manager-Accounts) (108 Points)

10 January 2010

sir

what is the provisions regarding claiming deduction in respect of investment in KVP and NSC under section 80C of the IT Act, 1961?

Is all whole amount ie the principal and interest is taxable on maturity?

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5 Replies

Amir (Learner) (4016 Points)
Replied 10 January 2010

Dear Swati,

NSC

1) On Investment - Deduction u/s 80 C is allowed

2) Accrual of Interest - Taxable under Income From Other Sources(If accrual method is followed) + Deduction u/s 80 C is allowed since amount of Interest gets reinvested.

3) On Maturity of NSC - Principal as well as Interest (if cash method is followed) is Taxable under Income from Other Sources..(There are few schemes in which only Interest is taxable)

KVP

1) On Investment - No deduction is available u/s 80 C

2) Interest - Taxable every year if accrual method is followed otherwise entire amount of Interest is taxable on maturity.

3) Maturity - Principal is not taxable..

dhrutik (Audit Assistant) (22 Points)
Replied 16 June 2010

sir

from when it is applicable, i feel that deduction is allowed and i invest in that.

pls. reply

thankss

Amir (Learner) (4016 Points)
Replied 16 June 2010

Pls check this link -

https://www.raagvamdatt.com/Comparison-between-NSC-and-KVP/65/

RITESH KOTHARI (B.COM, FCA, DISA(ICAI)) (778 Points)
Replied 16 June 2010

Inv in KVP is not allowed as deduction

subham agarwal (student) (25 Points)
Replied 14 January 2017

I invested in KVP in the Year 2009 and i am getting Interest since then every Year. i am filing return of Income for the first time in year 2015-16 . so my question is that is my entire interest is taxable( 2009-2015) under the head other sources while filing my return of Income.

regards,

Subham