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Nsc tax computation

Tax queries 459 views 2 replies

P V Deshpande

Professional

27 Points Joined March 2012

I have been purchasing 5-year NSC through Post Office every month (say 1000 Rs) in the name of my wife or sometimes jointly. My wife is home maker. My queries are as follows-

How to compute or calculate tax for such transactions?
Whether joint NSC is more beneficial from Income Tax point of view?

Kindly guide. Thanks

Replies (2)

Guest

Interest rate for NSC may depend on it's issue date. And interest is calculated compounded annually for which you get deduction u/s 80C. But in the year of maturity you may not claim it's intt. deduction. For income tax point of view, if you already claiming deduction of 1 lac u/s 80C, then your NSC intt. will be taxable.

Mihir

Wealth Manager

5293 Points Joined December 2008

NSC interest is taxable. The interest earned annually is reinvested and the same shall be eligible to be shown u/s 80C. The interest earned on maturity shall be taxable under the head income from other sources.