Whether Interest received on National Saving Scheme is exempt or taxable?
Puneet Nayyar (accountant) (33 Points)
30 November 2009Whether Interest received on National Saving Scheme is exempt or taxable?
CA. Varun Soni
(Chartered Accountant)
(201 Points)
Replied 30 November 2009
basically the interest earned on NSC is taxable but as per the provision of the income tax it is assumed to be reinvested so you can claim the deduction of such interest portion under section 80C but last years interest which you will get along with the maturity amount will be taxable.
Treatment of NSC interest
Income from Other Sources
Interest from NSC *********
Total Income ************
less deduction u/s 80C(Interest Amt.) **********
Sunali
(Learner)
(1317 Points)
Replied 30 November 2009
U can refer to
/experts/experts_message_display.asp?group_id=58671
As answered by CA Prakash Somani..
National Savings Scheme, 1987, was covered by Sec. 80CCB, which allowed the contribution as deduction from taxable income subject to the amount of both principal and interest being taxable on withdrawal. This scheme was closed with effect from April 1, 1992.
National Savings Scheme, 1992, allows deduction for the contribution made for this purpose under Sec. 80C subject to the ceiling under Sec. 80C with interest income being taxable, while the principal amount on return will not be so taxable.
Interest under this scheme can be offered either on accrual basis from year to year or on cash basis in the year of withdrawal
BVSRAnjaneyulu
(AGM)
(21 Points)
Replied 29 May 2014
what was the rate of interest on National Savings Scheme 1987 from the time of commencement i.e. 1987 till 2003? i am aware the rate of interest from 01.03.2003 has been slashed to 7.5% pa.
thanks
anjaneyulu
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