CA FINAL
547 Points
Joined September 2009
Sir , it is my request that before making any investment you should learn about its taxability.
The thing about NSC is that , yes its interest is fully taxable BUT on yearly basis under the head 'income form other sources ' . however the interest is never received by the person until the last year , it gets reinvested in NSC itself which allows you to claim its deduction under 80C of investment in NSC for that year , making it in effect tax free .
If you had showed it in your return on yearly basis and claimed it as deduction , only the the last year's interest would have been liable to tax as it never gets reinvested .
My advice , if it is POSSIBLE revise the last year return and file the current year return by showing only the final year's interest and forget about the rest.