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?
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3) As in last year the maturity value is withdrawn and hence no re-investment of accrued interest so duduction on interest U/S 80C in last year not eligible.
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??
CAclubindia
