ITR filing query: Can taxpayers defer National Savings Certificate interest reporting to retain Section 87A rebate?

A taxpayer has sought clarity on whether interest accrued on National Savings Certificate (NSC) can be reported in a later financial year to keep taxable income below the threshold for claiming the Section 87A rebate. The query comes after the taxpayer's wife, a self-employed professional who follows the new tax regime, found that including the accrued NSC interest would push her income beyond the rebate limit and significantly increase her tax liability.

Today's Q&A explains such details in response to a query by a reader.

The taxpayers have the option to declare their income under the heads of income, i.e., "Profits and Gains of Business or Profession" and "Income from Other Sources", either on an accrual basis or on a receipt basis. The basis of accounting once selected for offering a particular income for taxation has to be followed consistently year after year and cannot be changed later on unless there are compelling reasons for doing so.

Disclaimer: The views and opinions expressed above are those of respective experts/commentators and do not reflect the views of Upstox. The above Q&A is only for informational purposes and should not be considered investment or tax advice from Upstox. Please consult a tax expert for your complex tax problems.