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Personal Finance News

Do senior citizens need to report National Savings Scheme (NSS) withdrawals in ITR for AY 2025-26?

rajeev kumar
By Rajeev Kumar

3 min read | Updated on July 10, 2025, 09:38 IST

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SUMMARY

If you made the withdrawal from NSS after August 29, 2024, then you need not worry about showing it as income from other sources in ITR for FY 2024-25 (AY 2025-26).

NSS withdrawal reporting in ITR

NSS withdrawals are tax free for senior citizens. | Representational image source: Shutterstock

Question by V S Srinivasan: Since the CBDT has issued a notification that no tax will be deducted in respect of withdrawal from NSS 1987, will it be necessary to include the amount withdrawn as income from other sources while filing the income tax return (ITR)?
Answer: It is not necessary to include the amount withdrawn from NSS as income from other sources. However, this will apply only to those withdrawals that were made on or after August 29, 2024, according to tax experts.

So, if you made the withdrawal from NSS after August 29, 2024, then you need not worry about showing it as income from other sources in ITR for FY 2024-25 (AY 2025-26).

CA Dr Suresh Surana has explained the reasons for the above in detail below:

Section 80CCA of the Income Tax Act originally permitted deductions for deposits under the National Savings Scheme (NSS), but such deductions ceased from 1 April 1992.

However, withdrawals of these pre-1992 deposits, along with accrued interest, remained taxable under Section 80CCA(2) of the Income Tax Act.

Further, the government vide Notification dated 29 August 2024 discontinued interest payments on NSS balances post October 1, 2024. Thus, in order to provide relief, the Finance Act, 2025 amended Section 80CCA to exempt from tax any withdrawals made by individuals on or after August 29, 2024, in respect of such deposits and accrued interest.

Accordingly, CBDT vide Notification No. 27/2025 dated April 4, 2025, also provided that no tax shall be deducted at source (TDS) u/s 194EE of the IT Act on payments made to an individual withdrawing amounts referred to in Section 80CCA(2)(a) of the IT Act.

This exemption applies to withdrawals from the National Savings Scheme (NSS), including the NSS-87 Account, and is effective from the date of publication of the notification in the Official Gazette i.e. 4th April 2025.

In light of the above, it is not necessary to include the amount withdrawn from the NSS-87 Account as income under the head "Income from Other Sources" while filing the income tax return, provided the withdrawal is made on or after August 29, 2024.

When can you file ITR?

You can file the ITR now. The due date to file ITR for AY 2025-26 has been extended this year to September 15, 2025.

Disclaimer: The views and opinions expressed above are those of respective experts/commentators and do not reflect the views of Upstox. This content is only for informational purposes and should not be considered investment advice from Upstox.
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About The Author

rajeev kumar
Rajeev Kumar is a Deputy Editor at Upstox, and covers personal finance stories. In over 11 years as a journalist, he has written over 2,000 articles on topics like income tax, mutual funds, credit cards, insurance, investing, savings, and pension. He has previously worked with organisations like 1% Club, The Financial Express, Zee Business and Hindustan Times.

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