10-mark question · Part C · Law of Taxation

In the year 2020, the assessee took a personal loan and invested the money in the National Savings Certificate. Since he did not make this investment from his taxable income, he did not claim tax deduction under section 80C. In the subsequent years, interest income accrued on the NSC would form part of "income from other sources". Your client seeks your advice as to whether he can claim deduction for the interest accrued, which will be invested every year for the next five years. How should NSCs received as a gift be treated? Advise.

Appeared in

• Law of Taxation · September/May 2022 Mapped paper Download

Mapped topics

• Previous year, assessment year and the charging section — Unit I
• Salary and income from house property — Unit II
• Profits of business, capital gains and other sources — Unit II

Mapped case laws