1. Sec 80C of Income Tax Act, 1961 allows deductions on National Saving Certificate Investment

2. Maximum Limit allowed is Rs 150000/- per Financial Year.

3. Deductions allowed for Individuals & HUF

4. In case of Individual, deductions allowed for investment made in self or as a joint holder.

5. Normally in post office, there are two types of joint holding. “A” type is two or more persons required to sign the documents during withdrawals. In case of “B” type either or survivor required to sign the documents i.e. any one person required to sign.

6. Who can take sec 80 C benefit in case of Joint holding?

(i) Sec 80 C deductions allowed to joint holders as per the circular no 405[F.No178/I/84-IT(A-1)],dated 15.01.1985 as corrected by circular No-418[F.No178/I/84-IT(A-1)],dated02-05-1985

(ii) As per the above circulars deductions allowed only to the first holder

(iii) Subject to below conditions

(a) first person contribute the money out of his income chargeable to tax.

(b) Interest accrued on above Investment will be chargeable to tax in the hands of person who makes the Investment(i.e. First Holder)

(iv) To make a proof of the contribution, kindly make an investment from Bank Account of the first holder. Then it’s easy to prove at the time of Assessment.

(v) Kindly show the interest accrued Income on NSC and takes the reinvestment benefit u/s 80C.

If you need more clarification on this kindly send mail to xavierredhills@gmail.com with title “Joint holding of NSC “.

Contributed by- T.Xavier M.Com, PGIT, (ICWAI- Final)

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Category : Income Tax (24907)
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Tags : Income Tax Deductions (418) nsc (24) Section 80C (134)

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