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Interest Accured on NSE

Raman (Salaried) (78 Points)

18 March 2008  

Hi Experts,

What is the treatment of interest accrued on NSC for PY 2007-08. Is it to be included as a part of other income and then later considered as a part of investment under 80C?

I have given detailes of interest accrued on NSC to my employeer and he is not considering accrued interest on NSC as a part of investment under 80C. He says that I can show it at time of filing the income tax returns. Because, I have to declare the same in Other Income also.

Can anyone point me towards any writeup on web on this, so that I can show it to my employeer.

TIA for youe time and help.



 6 Replies

CA Praveen Chopra (Chartered Accountant) (1382 Points)
Replied 18 March 2008

I don`t understand why your employer don`t take this for 80C. It is obligatory on the part of the employer to take on records the documents submitted by employee. If  you furnish the copy of NSC to employer alongwith computation of interest on that, it is obligatory for the employer to consider it.

Replied 18 March 2008

Acc. Interest on NSC is eligible for deduction u/s 80C. As such accrued part is reinvested as investment. However, Int . accrued on 6th will not be eligible for deduction u/s 80C as such part is not foring part of reinvestment.


U/s 80C -Investment in NSC and Interest accrued on NSC is deductible as per the chart given in Ready Recknor.  But at the same time interest to added in other income as the same is taxable as per the amendment in the act.  Every accountant appliying their own openion.

KRATI (STUDENT) (110 Points)
Replied 18 March 2008

if it is 6th year of NSC then interest is not accrued interest, it is maturity interest this is not given as deduction in 80C.

pushpendra (Director- FinMAT Consultants)   (1698 Points)
Replied 18 March 2008

You have to fill your statement of income in the specific fomat given by the employer for the pupose of TDS. in that form there is col. of any other income reported by the employee. if you show there intt. on NSC as your income it is obligatory to considered as your income if he not considered then he will be default as per the provision of TDS and even liable for penalty also.

Replied 19 March 2008

If ur employer is not considering such income its not aproblem as the same can be shown by u in return to be filed.

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