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NSC Tax Benefit in Computation of Salaried Income

Others 1259 views 2 replies

Shilpa

HR Manager

24 Points Posted on 06 May 2009

I am in the process of revamping IT declaration by employees for F.Y. 2009-10.

Please find attached 2 excel formats but they are based on F.Y. 2008-09.

Please explain me how to treat fresh investment in NSC and interest on NSC in exemption - while tax computation of salaried persons.

my email id is shilp_umakant @ yahoo.com. Please mail to me as i m new o cite and really dont know how to visit back my post.

Thanks

Regards

Shilpa

Attached File : 35 nsc.xls downloaded: 164 times

Replies (2)

N.J.R

Practice

346 Points Posted on 06 May 2009

Dear Shilpa,

(1) NSC Purchased during the year : Eligible for deduction u/s 80C [Aggregate admissible amt. u/s 80C is Rs. 100,000]

(2) NSC purchased in any previous year : Interest accrued on NSC should be added to Income & also eligible for deduction u/s 80C as such Interest accrued is considered as reinvested. In the last year i.e. in 6th completed year, interest accrued should be added to income but that interest is not eligible for deduction u/s 80C.

For Interest Rates on NSC, pls refer to Table for NSC given in Income Tax Ready Reckoner by V G Mehta.