Ans: You can show the interest on NSC while filing income tax returns through one of the ways given below: Do not claim your interest as income or deduction. Under this case, your interest will fall under other sources of income during the previous year. Just interest of the first 4 years will be applicable as a tax deduction. You may claim a deduction on NSC interest but don't showcase it as earnings. In this case, you may consider your interest income over the years as earnings during the previous year.  You may showcase your NSC interest under income from other sources.