Kapadia Pravin
(17264 Points)
Replied 15 August 2019
CA. Manish K Maheshwari
(Chartered Accountant)
(49 Points)
Replied 16 August 2019
NSC interest is taxable. However, as it is a cumulative scheme (e.g. interest is not paid to the investor but instead accumulates in the account), 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.
shrey salecha
(51 Points)
Replied 16 August 2019
Gaurav
(PO)
(68 Points)
Replied 16 August 2019
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 16 August 2019
1. National Savings Certificate (NSC) is one of those investment contemplated u/s 80C. It comes with a lock-in period of 5 years or 10 years.
2. Interest earned on these certificates will be payable only upon the maturity and interest accrued every year will be considered as reinvestment and qualify for deductions u/s 80C.
3. In your case whatever the interest earned up to year 4 will not be taxable, however, interest earned on 5th year will not be reinvested and hence it will be considered as interest earned and will be taxable under Income from Other Sources(IOS).
Please correct me if the above solution has an alternative view.
Gaurav
(PO)
(68 Points)
Replied 17 August 2019
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 17 August 2019
1. If the property is an ancestral property then rightfully only the legal heirs have rights over that property. In your case, let's say the land belongs to you. And even if the same was blended in favor of HUF for inadequate consideration, still any income accruing or arising out of such land will be taxable in the hands of the transferor.
2. If the property jointly belongs to family members then income shall be jointly be taxed their proportion of rights.
3. As per explanation 2 to sec 64(1A), any income earned arising out of immovable property transferred without adequate consideration will be taxable in the hands of the transferor.
4. In your case, if the land belongs to ancestors, then obviously there will be the legal heir to such land. Only the legal heir can be the rightful owner of the property and any income arising out of such land will be taxable only in the hands of such an individual.
5. With the information you have provided if the land belongs to you then payment received from sale of mustard will be taxable in your hands and if the land equally belongs to the all the three of you (as per legally) then income received from govt towards sale of mustard will be taxable respectively in all of your 3 hands.
Please correct me if the above interpretation has an alternative view.
Gaurav
(PO)
(68 Points)
Replied 17 August 2019
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