Section I: Income Tax and Your Investments

• Ques: NSC interest is fully taxable
• Ans: Key points:
  • National saving certificate interest is now fully taxable in the year of accrual.
  • The interest earned on NSC is deemed reinvestment under section 80C for deduction up to Rs. 1,00,000.
  • The interest on NSC is payable 8% pa. and compounded half yearly.
  • Minimum Rs. 100 can be invested and there is no upper limit for investment in NSC.
  • NSC is six year fixed return tax saving instrument.