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How to calculate interest on NSC for a financial year when bought on a random date?

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Sanjit

not applicable

94 Points Posted on 07 May 2022

I have purchased Rs 150000 worth of National Savings Certificate at say 6,8% on August 21st 2021 and would like to calculate the interest earned on the same for the financial year 2021-22 for these 7 months and 12 days. Is this how it is done? or should i calculate one year's interest in August 21st 2022 and declare the same as my income for the financial year 2022-23 (and none from this investment this year)?

Thank you

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Quick Summary

This discussion clarifies how to calculate the interest earned on a National Savings Certificate (NSC) purchased partway through a financial year. The correct method involves calculating the pro-rata interest for the portion of the financial year the NSC was held, rather than waiting for the full year's interest to accrue. Therefore, interest earned from August 21st, 2021, to March 31st, 2022, should be declared for the financial year 2021-22.