I HAVE A QUERY REGARDING NSC, SUPPOSE
NSC IS FOR RS.10000
INTEREST ON NSC IS RS 800
RS.10000, DEDUCTION WILL BE UNDER 80C
RS.800, WILL BE TAXABLE UNDER OTHER SOURCES,
NOW I WANT TO KNOW , IN THE NEXT YEAR INTEREST WILL BE CALCULATED ON RS.10800 OR RS.10000
it depends on situation to situation means if u have reinvested the intt then obvious next year inntt will be on 10800
Firstly intt on NSC will be added under the head other source and deduction will be applicable 10800 u/s 80c because intt on post of office deposit exempt from the consideration of income tax. and intt will be calculated on 10800 or 10000 it will be depend upon the consideration of reinvestment.
dear
in the income tax act interest on nsc is considered as deemed to be reinvested and therefore deduction u/s 80C is available for both new investment and interest accrued during the year
since interest is considered as deemed to be reinvested in next interest will be caclulated on 10800.
to avoide all such difficulties use interest table given in ready reckneor.
CAclubindia
