Taxability of interest on National Deposit Scheme - Income Tax - 406/1985

Taxability of interest on National Deposit Scheme Circular No. 406 Dated 21/1/1985 The National Deposit Scheme was launched by the Central Government with effect from 30-7-1984. Interest on deposits under this Scheme is paid or compounded on half-yearly basis. The Central Government has amended the Scheme to provide that in respect of deposits made in the financial year 1984-85, interest up to 31-3-1985 will be deemed to have accrued on 31-3-1985, even though the actual payment or compounding is made on half-yearly basis. 2. The Board is of the view that such interest is taxable in the year of accrual. (Sd.) R.K. Tewari, Under Secy. Central Board of Direct Taxes.