NSC Interest-

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.

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