Patricia (C.S.- Professional) (sdd) (197 Points)
26 June 2009VERY URGENT
In the FY 2008-09, I had purchased NSC of Rs. 35000 and shown whole Rs. 35000 u/s 80-C as Deduction. But , do I have to show Accrual of Interest in the First Year of Purchase (FY 08-09) or from the 2nd year, NSC interest is to be taken. As I 've to file ITR, I am confused about the same. In Form 16 issued to me from the Employer, HO has shown whole Rs. 35000/- u/s 80-C ? But of Intrest part, do i 've to mention in my ITR ??
Thanks m regards, Gud Day
Patricia
NSCs have a maturity of 6 years. They offer a rate of return of 8% per annum. This interest is calculated every six months, and is merged with the principal. That is, the interest is reinvested, and is paid along with the principal at the time of maturity.
Interest accrued on NSC which is deemed to be reinvested is eligible for deduction under 80C for the first five years.So both principle and interest portion are taxable at the time of maturity i.e. on 6th year.
Hav a nice day!!!!
CAclubindia
