NSC Taxation

Interest should be taxed at every year

interest accrues every year and it's taxable every year.
Also interest accrued is eligible for 80C benefit every year

interest from NSC is exempt from tax

NSC interest is taxable. However, as it is a cumulative scheme (e.g. interest is not paid to the investor but instead accumulates in the account), each year’s interest is considered reinvested in the NSC. Since it is deemed reinvested, it qualifies for a fresh deduction under Sec 80C, thereby making it tax-free. Only the final year’s interest, when the NSC matures, does not receive a tax deduction as it does not get reinvested, but is paid back to the investor along with the interest of the earlier years and the capital amount.

Dear Sir, in short we can say that only last year NSC interest is taxable as it is not reinvested.

That means the interest occurs will come under the head "income from other sources" and will again be eligible for 1.5 lakh limit under 80C except for the final year.

1. National Savings Certificate (NSC) is one of those investment contemplated u/s 80C. It comes with a lock-in period of 5 years or 10 years. 
2. Interest earned on these certificates will be payable only upon the maturity and interest accrued every year will be considered as reinvestment and qualify for deductions u/s 80C. 
3. In your case whatever the interest earned up to year 4 will not be taxable, however, interest earned on 5th year will not be reinvested and hence it will be considered as interest earned and will be taxable under Income from Other Sources(IOS).
Please correct me if the above solution has an alternative view. 

can anybody guide on this too?

Hi, I have received payment from government of India for selling mustard to them wherein the J-Farm are in our individual names( mine,my mom and my sister). My mom is karta of HUF .This land is ancestral property.As the land can't be in the name of HUF and doesn't have adhaar card, registration for selling crop can't be done for HUF . So the payment thus received in our individual accounts will that be our individual income or will be considered as HUF income since the land belongs to all 3 of us in equal parts.

Please keep in mind that I have job therefore HUF was formed.

1. If the property is an ancestral property then rightfully only the legal heirs have rights over that property. In your case, let's say the land belongs to you. And even if the same was blended in favor of HUF for inadequate consideration, still any income accruing or arising out of such land will be taxable in the hands of the transferor. 
2. If the property jointly belongs to family members then income shall be jointly be taxed their proportion of rights.    
3. As per explanation 2 to sec 64(1A), any income earned arising out of immovable property transferred without adequate consideration will be taxable in the hands of the transferor. 
4. In your case, if the land belongs to ancestors, then obviously there will be the legal heir to such land. Only the legal heir can be the rightful owner of the property and any income arising out of such land will be taxable only in the hands of such an individual. 
5. With the information you have provided if the land belongs to you then payment received from sale of mustard will be taxable in your hands and if the land equally belongs to the all the three of you (as per legally) then income received from govt towards sale of mustard will be taxable respectively in all of your 3 hands. 
Please correct me if the above interpretation has an alternative view. 

The land belongs to all three of us in equal proportion, then what is the purpose of HUF if it has to be taxed in our individual capacity only. Obviously the karta ( my mom) and both coparceners( me and my sister ) has land in our individual name since the Stamp duty act allows the land to be in the name of living being only and since HUF is not a living being ,the land can't be in the name of the HUF . Also till now there is no provision of HUF to hold adhaar card which is kind of mandatory for such payments by government of India , the payment was received in our individual name. But all this income is agriculture income hence should be part of HUF income though received in our individual name.