The 60-second version
Section 194EE requires 10% TDS on interest paid on NSC — post office deducts at payout. I claim credit in ITR and use Form 15G/15H if below exemption.
194EE triggers at NSC interest payout — not at purchase
Section 194EE applies when interest is paid on National Savings Certificates — post office deducts 10% TDS at encashment or interest credit.
NSC interest is taxable as income from other sources — no 80C on interest portion.
Senior lane: Form 15G/15H guide.
Post office TDS matrix
| Instrument | Section | Rate |
|---|---|---|
| NSC interest | 194EE | 10% |
| SCSS interest | 193 | 10% |
| POMIS interest | 193 | 10% |
| PPF interest | Exempt | No TDS |
194EE sequence
NSC maturity
Post office encashment.
TDS deducted
10% on interest.
26AS
Verify credit.
ITR
Declare interest income.
Refund
If tax nil after 15G/15H.
Flow
194EE kit
- NSC certificate.
- Encashment receipt.
- TDS cert.
- 26AS.
- ITR ACK.
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Form 15G/15H
Submit before encashment if total income below taxable limit — avoids TDS deduction.
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NSC purchase TDS?
No — 194EE only on interest payout.
NRI NSC?
NSC generally for residents — redesignate KYC first.
80C on NSC?
Purchase qualifies 80C — interest is taxable.
No PAN?
20% TDS per Section 206AA.
Joint NSC?
TDS per holder share — PAN each.
Reinvest NSC?
New purchase — fresh 80C clock.
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