Sweta Jalan (Company Secretary) (177 Points)
11 June 2009while giving benefit of 80C investments by an employer to an employee, will interest on NSC allowed as 80 C investment. and if allowed whether the same amount of interest shud be shown as income from other sources by the employer. means net effect of nil for tds calculation purpose.? plz somebody explain
PiyushAgrawal
(Chartered acooutant in practice)
(575 Points)
Replied 11 June 2009
| Originally posted by :Sweta Jalan | ||
| " | while giving benefit of 80C investments by an employer to an employee, will interest on NSC allowed as 80 C investment. and if allowed whether the same amount of interest shud be shown as income from other sources by the employer. means net effect of nil for tds calculation purpose.? plz somebody explain | " |
Invetment in NSC is deductible in income tax...
if we book accrued int than it is taxble in IFOS head and also should deduct from GTI. so there is no effect of accrued int.
but if anyone is not accounting interest than he will pay tax when he will get int on maturity.
yes, Interest income earned from NSC should be shown in Income from other sources and as the interest is reinvested till 5 years (maturity ) it will considered in deduction U/s 80 C
When will the NSC matured, Only interest for the particular FY will be considered as income from other sources.
The impact will be nill but it will decrease the max. limit of 80 C.
>> Rajesh
| Originally posted by :Aditya | ||
| " | what will be the treatment of interest on maturity, if we don't show the accrued interest as income from other sources and also dont claim deduction u/s 80 C every year ? |
" |
at the time of maturity only last year's Interest amount will shown as income from other sources. No deduction for such amount can be allowed u/s 80c.
more ever if you are not showing the accrued interest in each year then you have to show all interest income at the time of maturity of NSC.
Aditya Maheshwari
(CA in Practice)
(35867 Points)
Replied 11 June 2009
Interest during the year of maturity will only be allowed u/s 80C and entire interest will be taxable in the year of maturity.
If every year accrued then income from other sources and 80C benefit.
Satish
(CA Final Student)
(479 Points)
Replied 12 June 2009
Aditya, we need to check once again whether interest during the year of maturity is allowed u/s 80 C since it is not going to be reinvested.
manas bhatt
(CA)
(83 Points)
Replied 12 June 2009
interest in the year of maturity is not allowed as deduction u/s 80C since it is not going to be reinvested.
Live class on PF & ESI Enrollment & Returns Filing(with recording)
CAclubindia
