Kiran. S (CTO) (745 Points)
20 August 2015My Client wants to withdraw National Saving Scheme [87] . His principal was 5000 and now total is 44k.
My question is whether 20% of balance [44k] will be deducted or 20% of [44-5]k will deducted
Also does Post office file TDS return. Will it be reflected in his 26As.
Santosh V. Thakur
(Sr. Accountant)
(187 Points)
Replied 21 August 2015
As per my opinion, Interest on National Saving Certificate (NSC) is liable to Tax as per Income Tax Slab, no TDS is deducted on interest on NSC, but such interest should be reflected in Income Tax Return of the individual.
S. Shiroor
(Others)
(1207 Points)
Replied 21 August 2015
NSS scheme 1987 was closed in 2002. TDS will be deducted on Interest component only and not on Principal. All Post office have got TAN No. They will deduct tax at 20% on (Balance -Principal). You will receive TDS on 26AS. The interest acrued but not paid is fully exempt from IT under 80L. and can be taken as Re-investment The Scheme wa very popular bcoz 100% investment was directly deducted from tax while in NSC 20% of Invested was deucted from Tax. But Catch is 20% of interest will be deducted as TDS at time of withdrawl.
7. The Scheme of Post Office (Time Deposits) governed by the Post Office (Time Deposits) Rules, 1970 and The Scheme of Post Office (Recurring Deposits) governed by the Post Office (Recurring Deposits) Rules, 1970 vide Notification No. 2879, dated 1- 9- 1970 ] and the National Savings Scheme, 1992 vide GSR 820 (E), dated 21- 10- 1992 ] have been notified.
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