Deduction u/s 80 c
This query is : Resolved
21 August 2015
R/s.
In F.Y.2014-15 my NSC of Rs.90,000/- matured & I got interest of Rs.54,090/- on it. I also reinvest 1,20,000/- in NSC. So is the Interest on NSC is taxable or tax free.
In F.Y.2014-15 my NSC of Rs.90,000/- matured & I got interest of Rs.54,090/- on it. I also reinvest 1,20,000/- in NSC. So is the Interest on NSC is taxable or tax free.
CMA MALHAR BEHERA
(Expert)
21 August 2015
NSC interest is taxable. However, as it is a cumulative scheme, 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.
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.
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