I have taken NSC for Rs.55000 3 years back. I have not showed the interest earned for income tax calculation. So, at the end of 6 yrs, when i get the money back, do i need to pay tax for the interest earned.
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I have taken NSC for Rs.55000 3 years back. I have not showed the interest earned for income tax calculation. So, at the end of 6 yrs, when i get the money back, do i need to pay tax for the interest earned.
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yes accrued int of NSC has to be added for income tax calculation..
Hi Dear
Yes the Intrest Income from NSC is Taxable.
accrual of interest is not taxed as it it is reinvested but in maturity such income will be taxed
Tax Implications of investment in N.S.C.s:
•The capital investment in N.S.C.s qualifies for rebate u/s 80C in the first year of investment.
•Thereafter (after completion of one year) for the next 5 years the annually accrued interest on N.S.C.s is eligible for rebate u/s 80C as it is considered reinvested in N.S.C.s
•Also this annually accrued interest is taxable on an accrual basis every year under the head Income from Other Sources.
•If the accrued interest is not taxed every year on an accrual basis than the entire income becomes taxable during maturity / withdrawal.
HMT