Tax treatment of National Saving Certificate and Indira Vikas Patra

National Savings Certificates (NSC), Kisan Vikas Patra (KVP) and Indira Vikas Patra (IVP) will also be considered as “capital assets” and accordingly the assessee will be entitled to compute the Long Term Capital Gains/Loss after applying cost inflation index. However, the interest accrued on NSC, KVP and IVP has to be offered to tax on year to year basis. However, inclusion of interest accrued on NSC, KVP and IVP in the Income Tax Return will not be relevant for the purpose of considering the same as capital assets. It may be pointed out in this context that interest is paid on debentures and dividends is paid on shares and still both are considered as capital assets. As a result, on maturity of NSC, KVP and IVP the assessee will have notional Long Term Capital Loss and the same may be utilised to set off against Capital Gains. If such loss remains unabsorbed fully or partly, it can be carried forward for 8 years and set off against Capital Gains. is here to solve all your tax worries, be it relating to Tax Returns, Tax Support or Tax Planning.  Just contact us; we are here to relieve you from all your tax worries.

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