Interest on nsc in the name of minor child

- If NSC is purchased in name of minor child in previous year & deduction is claim by parent u/s 80C

- If in current year minor child matured than interest on NSC will be included in the income of parent or child 

 

Replies (3)

as the form of minor child is signed by parent, so the payment would be received by parent only on behalf of child, 

its not important that parent/ child will account the maturity proceeds, as the receipt of NSC is tax free, ( its deducted from taxable income at the time of investment)

-If interest is included in parents income than it affect deduction under 80C

-If interest is incuded in child income who is major now, has NIL return han no need to file return

 

Than in whose income interest is to be included

Originally posted by : MOHIT GARG

-If interest is included in parents income than it affect deduction under 80C

-If interest is incuded in child income who is major now, has NIL return han no need to file return

 

Than in whose income interest is to be included

as all the income of minor child is governed by the legal guardian / parents, so the interest incomes also get clubbed in hands of parents.

after maturity, the instrument is transferred in hands of convedrted child, and afterwards the major child is liable for tax treatment, 

Here i have to point out that unless the instrument is transferred to the chjild after majority attain at post office, the same is likely to to be reflected in the accounts of parents.

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