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Is my returns from nsc investments taxable post maturity period. i am a sole proprietrix? |
Is my returns from nsc investments taxable post maturity period. i am a sole proprietrix? Till FY 2004-'05, an individual could avail of a deduction under Section 80L of the Income Tax Act. This limit was Rs 12,000 of interest income received during the financial year. This deduction has been done away with from FY 2005-'06. Now, all interest income is taxable at the respective slab rate of the individual. The interest accrued on NSC is taxable. But, it is also eligible for a deduction under Section 80C. Generally, it is advisable to declare accrued interest on NSC on a yearly basis. So, over the period of six years, you could declare the interest income for each year. In such a case, it does not amount to a huge sum. If you do not declare the interest on accrual basis, then the entire interest earned (difference between the amount deposited and the maturity value) would accumulate in the year of maturity. You could then claim it under Section 80C but it would be a huge amount and would be taxable at the current applicable tax rate Intrest amount from NSC can be clubbed in Sec 80C deductions, but if it crosses 100000 then it is taxable as per applicable tax slab rate |
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