Resolution of Potential Double Taxation on NSC Interest Due to AIS Mismatch in FY 2023-24

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  • Background:
    I had a National Savings Certificate (NSC) that I redeemed in the current financial year (FY 2025-26). The full maturity amount—including all accrued interest—was credited to my account this year, and I paid advance tax on the interest income in anticipation of including it in my ITR for this year.

  • Last Year’s Issue (FY 2023-24 / AY 2024-25):
    The post office (Postmaster General, Chennai City Region) reported accrued interest from my NSC for FY 2023-24 in the AIS (Annual Information Statement). I was not aware of this when I filed last year’s ITR, so I did not report this interest income at that time.

  • AIS Feedback Process:
    After receiving a notification from the Income Tax Department, I submitted feedback on the AIS, initially denying the reported income since I hadn’t recognized it. The post office rejected my feedback, confirming their information was correct. Realizing the interest was indeed from my NSC, I later updated my feedback to “Information is correct” in July 2025.

  • Revision Hurdle:
    The deadline to file a revised or belated return for FY 2023-24 has passed (it was December 31, 2024). So, I cannot update last year’s ITR to include the NSC interest for that year.

  • Current Year (FY 2025-26 / AY 2026-27):
    I plan to declare the full interest income and claim the advance tax I paid when filing my ITR this year.

  • Key Concern:
    Since I didn’t declare the NSC interest in last year’s ITR (now accepted as “correct” in AIS), I might receive a notice or demand from the IT Department for FY 2023-24.
    If that happens, it appears I’ll have to pay tax on the same NSC interest for the previous year—even though I am already paying on the entire amount in this year’s return. I only want to pay tax on this interest once, not twice.

  • What I Need Clarification On:1. How can i settle the previous AIS issue (i want to pay the tax but dont know how to)?2. Do i have to wait for another notice to pay for it?
    3. Even though i want to pay in the current financial year (but some people are suggesting to not mix it up with the last year), so what to do?

Replies (1)
  1. Declare only current year's interest as reported in AIS for the return to be filed.
  2.  File updated ITR U for AY 2024-25 with additional tax liability.

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