NSC interest
This query is : Resolved
09 December 2010
Hi,
The interest income on NSC for first five years is exempt from tax U/s 80C. If an assessee purchases NSc in the mid of F.Y> like say November .Now in his IT return can he claim accrued interest Of Rs.80.16 on Rs.100 for full year or interest will be calculated proportionately for 4 months?
The interest income on NSC for first five years is exempt from tax U/s 80C. If an assessee purchases NSc in the mid of F.Y> like say November .Now in his IT return can he claim accrued interest Of Rs.80.16 on Rs.100 for full year or interest will be calculated proportionately for 4 months?
09 December 2010
INTEREST WILL BE CALCULATED ON YEARLY BASIS.
PLEASE SEE V.K.SINGHANIA'S DIRECT TAX BOOK
PARA NO 235.3
PROBLEM NO 235.3.P1
PLEASE SEE V.K.SINGHANIA'S DIRECT TAX BOOK
PARA NO 235.3
PROBLEM NO 235.3.P1
09 December 2010
1) Interest on NSC is not exempt U/S 80C, but it is reinvestment of interest accrued on NSC is consider as eligible deduction U/S 80C.
2) Interest on NSC accrued on yearly basis So practice is to take income for full year from the next year and claim the same as eligible deduction U/S 80C,
3) As in last year the maturity value is withdrawn and hence no re-investment of accrued interest so duduction on interest U/S 80C in last year not eligible.
2) Interest on NSC accrued on yearly basis So practice is to take income for full year from the next year and claim the same as eligible deduction U/S 80C,
3) As in last year the maturity value is withdrawn and hence no re-investment of accrued interest so duduction on interest U/S 80C in last year not eligible.
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10 December 2010
So, according to you i should not take any interest in this year but should start showing interest in IT return from next F.Y. i.e, 2011-12??
10 December 2010
First year interest should be taken in the F.year 2011-12.
for detail clarification
PLEASE SEE V.K.SINGHANIA'S DIRECT TAX BOOK
PARA NO 235.3
PROBLEM NO 235.3.P1
for detail clarification
PLEASE SEE V.K.SINGHANIA'S DIRECT TAX BOOK
PARA NO 235.3
PROBLEM NO 235.3.P1
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