Tax Deduction of Interest earned on National Savings Certificate in Final Year

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  1. Dear Sir/Madam,
    An assesse had purchased two no's of NSC one on April'2008 and another on May'2009. My question is whether the Interest on both the NSC is allowable as deduction under section 80C for the F.Y. 2014-15 relevant to A.Y. 2015-16.

    Please reply as early as possible. Your valuable reply would be helpful for me.

    Abhishek Roy Choudhury.
  2. V K Khanna

    V K Khanna Active Member

    Deduction u/s 80C on account of interest accrued during the last fy in which the NSCs attained maturity cannot be claimed.
    Since the interest amount cannot get reinvested during the last fy before maturity, it doesn't qualify for deduction.
  3. Dear Sir,
    I am just confirming once that are you saying that interest on NSC of May'2009 can be taken as deduction under section 80C and interest on NSC of April'2008 cannot be taken as deduction under section 80C for the F.Y. 2014-15.

    Please tell whether I am wright or wrong.

    Abhishek Roy Choudhury.
  4. V K Khanna

    V K Khanna Active Member

    Dear Abhishek

    You are not clarifying whether the NSCs you hold are of six years duration or of five years maturity.

    Pl be clear if these are of six years duration, sixth year interest will not qualify for deduction under 80C. In case the NSCs are of five years duration, the fifth year interest won't qualify for deduction.

    Back to your specific query, I presume that interest for NSCs for the fy 2008-09 is 5th year (of 6 year duration) and interest for FY 2009-10 is of 6th year. If this being so your presumption is correct.
    ZED likes this.
  5. Yatin Gandhi

    Yatin Gandhi Active Member

    V K Khanna likes this.
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