NSC is the scheme promoted by Government of India and considered as one of the safest investment option for citizens. Investment in NSC can be done through Post offices. The investor will get interest on yearly basis. The period of investment may be for 5 years to 10 years from the investment date. Interest on NSC will be accrued till the maturity and will be given to the investors along with principal amount on maturity.
Features of NSC are:
- It is a risk free investment backed by Government of India
- Flexibility in investment starting from Rs. 100 and there is no upper limit
- NSC can be easily purchased from Post offices
- NSC can be purchased in the name of minor also
- NSC provides deduction of up to Rs. 1,50,000/- annually from the income of Assessee
- NSC can be transferred to the name of other family members in case of death
Interest Rate of NSC is as under:
|Financial Year||Quarter||Interest Rate|
|Q2, Q3, Q4||7.90%|
Eligibility to Invest in National Savings Certificate
- All Residents Indians are eligible to invest in NSC
- NRI cannot invest in NSC. But they can hold their old investment till it matures
- Karta of an HUF can invest in NSC in the personal capacity
NSC is a tax saving investment. Principal amount invested up to Rs. 1,50,000/- per annum is eligible for tax deduction.
Interest earned on investment in NSC will be reinvested for the next 4 years.
Interest earned at the 5th year is taxable, if it is not reinvested.
- Resident individual only can apply for a loan against NSC
- Some banks and financial institutions are offering loan against NSC
- The loan tenure will be up to the maturity date
- Duly filled NSC Application form
- Recent Photograph of the investor
- Identity Proof of the investor. Aadhaar Card, PAN Card, Voter ID Card etc
- Address proof of the investor. Aadhaar Card, Voter ID Card etc
Type of NSC Certificates
1. NSC Issue VIII with maturity period of 5 years
2. NSC Issue IX with maturity period of 10 years
Transfer of NSC Investment
NSC can be transferred from one Post office to another and one person to another
For Transfer of NSC from one Post office to another Form No. 32 can be filled.
For Transfer of NSC from One person to another Form No. 34 can be filled.
Premature withdrawal of NSC
NSC has a lock in period. Premature withdrawal of NSC is permitted only in specific cases, such as:
- Death of NSC holder
- Forfeiture by pledgee who is a gazetted government officer
- Court order for premature withdrawal of NSC
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