NSC curiosity declaration: What revenue tax rule says whereas ITR submitting — defined

We’ve got not declared curiosity on Nationwide Financial savings Certificates (NSC) within the first yr and neither claimed it underneath Part 80C. Can we begin doing this from the 2nd yr on wards i.e declaring 2nd yr curiosity on NSC and claiming it underneath Part 80C? Supposing we declare the curiosity yearly however submit workplace declares the lump sum curiosity for five years within the final yr in AIS/TIS underneath SFT part, will it not grow to be double declaration for us? As a result of our curiosity revenue in ITR ought to match with AIS and if we present solely fifth yr curiosity then IT may ship mismatch notices. Please information and make clear each these factors. My revenue is just not in taxable so no tax legal responsibility.

Reply: As per Part 145 of the Earnings Tax Act, all of the taxpayers having any taxable revenue underneath the top “Income and Positive factors of Enterprise & Occupation” and “Earnings from different sources” have choice to supply the identical both on accrual foundation or on receipt foundation. The identical must be accomplished persistently yr after yr. Both you possibly can declare all of the curiosity revenue on accrual foundation or on receipt foundation. You can’t present some curiosity on accrual foundation and a few on receipt foundation. 

So, the reply to your query would rely upon how you have got been providing different curiosity revenue yr after yr up to now. If in case you have proven it on accrual foundation, you can begin providing the curiosity revenue from NSC from second yr onward on accrual foundation and declare the 80C deduction. Since you can not revise your previous ITR, additionally, you will have to supply the primary yr curiosity additionally together with second yr curiosity. Nonetheless, deduction underneath Part 80C can be obtainable just for the second yr curiosity in my view. Please notice no deduction underneath Part 80C is out there in respect of curiosity for the firth yr.

So far as your query on AIS is worried, you needn’t fear. You don’t want so as to add the curiosity for earlier yr already accounted for within the ITR for the final yr even when the submit workplace reveals the combination curiosity for all 5 years within the final yr. You possibly can all the time clarify that although the submit workplace has proven lump sum curiosity for all of the years in a single yr, you have got been providing it yr after yr.

(Balwant Jain is a tax and funding knowledgeable and might be reached on [email protected] and @jainbalwant on his twitter deal with)

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