Interest income on maturity of NSC is taxable as income from other sources

Published: January 30, 2019 12:43 AM

Where no intima-tion is issued within a year, acknowledg-ment of the ITR shall be deemed to be the intimation.

The Act requires issuance of intimation within one year from the end of the financial year in which the ITR is filed.

By Chirag Nangia  

How is tax calculated for National Savings Certificates?
– Harsukh Singh
Amount invested in National Savings Certificates (NSC) is eligible for deduction under Section 80C up to the cumulative limit of `1.5 lakh. Interest income earned on NSC is not exempt from tax and is thus, required to be disclosed in ITR. However, as the same gets accrued and reinvested, it becomes eligible for deduction under Section 80C. Hence there is no tax liability on the regular accrual of interest on NSC. The interest income received on maturity is taxable as income from other sources.

I filed my ITR in July 2018 but have not got the status report that compares my filing with the department’s computations. What should I do?
—Taresh Thakur
The status report being referred by you, is intimation under Section 143(1) of I-T Act. The intimation is issued in case where refund is found payable, demand is raised or loss is adjusted after compu-terised processing of ITR against specified para-meters. The Act requires issuance of intimation within one year from the end of the financial year in which the ITR is filed. Where no intima-tion is issued within a year, acknowledg-ment of the ITR shall be deemed to be the intimation. Thus, you are not required to take any action.

Is is possible to file ITRs for FY 2016-17 and FY2017-18 together now as I have not filed them in the past?
—Achintya Sharma
Taxpayers who could not furnish ITR for any financial year within the specified due date have an option to furnish such return before the end of the relevant assessment year (AY). In your case, time limit to file the belated ITR for AY 2017-18 (FY 2016-17) has expired, thus, you shall not be able to file ITR for the said year. Whereas, you can furnish ITR for AY 2018-19 (FY 2017-18) before March 31, 2019.

My employer deducts tax from salary. Should I also pay advance tax in March on interest I get from bank deposits?
—Rishil Grover
Liability to pay advance tax arises if the total tax liability of a person equates or exceeds `10,000 for the year. The advance tax liability is required to be discharged in the proportion of 15%, 45%, 75% or 100% in each quarter which remains after reducing TDS therefrom. Thus, you shall be required to pay such proportionate advance tax on the bank interest which is remaining after the deduction of TDS.

The writer is director, Nangia Advisors LLP. Send your queries to
fepersonalfinance@expressindia.com

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