PLS HELP

RAJ KUMAR (FINANCE MANAGER) (1393 Points)

16 March 2010

HELLO FRIENDS, I HAVE PURCHASES NSC OF RS. 30000 IN 2006

AND KVP OF RS 50000 IN 2007 AND I HAVE DEPOSITED RS 70000 IN MY PPF A/C

PLS HELP ME WHAT IS THE TAX BENEFIT

IS THE CONTRIBUTION EXEMPTED OR INTERST AMOUNT IS EXEMPTED

PLS HELP ME

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3 Replies

Amir (Learner) (4016 Points)
Replied 16 March 2010

Dear Raj,

Interest on NSC is treated as income but on the other hand it is allowed as dedutcion under 80C since the amount of interets gets reinvested.

If Income has not been shown on yeraly basis then entire interest will be taxable in the year of maturity.

If NSC is of 7/12 years then its interest is exempt u/s 10(15)

Investment in PPF is eligible u/s 80 C for tax benefit. Its interest is exempt u/s 10(15)

Investment in KVP is not eligible u/s 80C. Interest is taxable either on receipt or accural basis as per method of accounting.

RAJ KUMAR (FINANCE MANAGER) (1393 Points)
Replied 16 March 2010

but the principal amt is claimed only in the year of investment in case nsc

Amir (Learner) (4016 Points)
Replied 16 March 2010

Ya u r rite

Investment in NSC will be eligible u/s 80 C for deduction.

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