National Savings Certificate Scheme

Post Office Savings Scheme India: National Savings Certificate Scheme (NSC)

Government of India is offering Postal Savings Scheme for Small Investors across the country. Under the Postal Savings Scheme, there are several schemes. One of which is National Savings Certificate (NSC) Scheme. The NSC Scheme is of 6 years tenure and provides Tax benefits.

General Features -

NSCs are issued in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 for a maturity period of 6 years. There is no prescribed upper limit on investment.

Individuals, singly or jointly or on behalf of minors and trust can purchase a NSC by applying to the Post Office through a representative or an agent.

One person can be nominated for certificates of denomination of Rs. 100- and more than one person can be nominated for higher denominations.

The certificates are easily transferable from one person to another through the post office. There is a nominal fee for registering the transfer. They can also be transferred from one post office to another.

One can take a loan against the NSC by pledging it to the RBI or a scheduled bank or a co-operative society, a corporation or a government company, a housing finance company approved by the National Housing Bank etc with the permission of the concerned post master.

Though premature encashment is not possible under normal course, under sub-rule (1) of rule 16 it is possible after the expiry of three years from the date of purchase of certificate.

Tax benefits are available on amounts invested in NSC under section 88, and exemption can be claimed under section 80L for interest accrued on the NSC. Interest accrued for any year can be treated as fresh investment in NSC for that year and tax benefits can be claimed under section 88.

• Minimum investment Rs. 100/- No maximum limit.
• Rate of interest 8% compounded half yearly.
• Rs. 1000/- grow to Rs. 1601/- in six years.
• Two adults, Individuals, and minor through guardian can purchase.
• Companies, Trusts, Societies and any other Institutions not eligible to purchase.
• Non-resident Indian/HUF can not purchase.
• No pre-mature encashment.
• Annual interest earned is deemed to be reinvested and qualifies for tax rebate for first 5 years under section 80 C of Income Tax Act.
• Maturity proceeds not drawn are eligible to Post Office Savings account interest for a maximum period of two years.
• Facility of reinvestment on maturity.
• Certificate can be pledged as security against a loan to banks/ Govt. Institutions.
• Facility of encashment of certificates through banks.
• Certificates are encashable any Post office in India before maturity by way of transfer to desired post office.
• Certificates are transferable from one Post office to any Post office.
• Certificates are transferable from one person to another person before maturity.
• Duplicate Certificate can be issued for lost, stolen, destroyed, mutilated or defaced certificate.
• Nomination facility available.
• Facility of purchase/payment to the holder of Power of attorney.
• Tax Saving instrument - Rebate admissible under section 80 C of Income Tax Act.
• Interest income is taxable but no TDS
• Deposits are exempt from Wealth tax.

Who Can Purchase? -

An adult in his own name or on behalf of a minor,

A minor,

A trust,

Two adults jointly,

Hindu Undivided Family

Nomination / Transferability -

Nomination facility is available.

Certificates can be transferred from one post office to any other post office.

Transfer from one person to another person permissible in certain
conditions.

Return / Interest / Maturity Value -

It is having a high interest rate at 8% compounded half yearly. Post maturity interest will be paid for a maximum period of 24 months at the rate applicable to individual savings account. A 1000 rs denomination certificate will increase to 1601Rs. on completion of 6 years.

Interest rates for the NSC Certificate of Rs 1000

Year                       Rate Of Interest

1 year                Rs 81.60

2 years              Rs 88.30

3 years              Rs95.50

4 years              Rs103.30

5 years              Rs 111.70

6 years             Rs 120.80

Tax Benefits -

Tax benefits are available on amounts invested in NSC under section 88, and exemption can be claimed under section 80L for interest accrued on the NSC. Interest accrued for any year can be treated as fresh investment in NSC for that year and tax benefits can be claimed under section 88. NSCs can be transferred from one person to another through the post office on the payment of a prescribed fee. They can also be transferred from one post office to another. The scheme has the backing of the Government of India so there are no risks associated with your investment.

 

Income Tax rebate is available on the amount invested and interest accruing every
year under Section 88 of Income tax Act, as amended from time to time. [under Sec 80C]

Income tax relief is also available on the interest earned as per limits fixed vied section
80L of Income Tax, as amended from time to time

How to buy / Invest in National Savings Certificates (NSC)? -
How to Get National Savings Certificate?

- Any individual or on behalf of minors and trust can purchase a NSC by applying to the Post Office through a representative or an agent.

- Payments can be made in cash, cheque or DD or by raising a debit in the savings account held by the purchaser in the Post Office.

- The issue of certificate will be subject to the realization of the cheque, pay order, DD. The date of the certificate will be the date of realization or encashment of the cheque.

- If a certificate is lost, destroyed, stolen or mutilated, a duplicate can be issued by the post-office on payment of the prescribed fee.

FAQs – National Savings Certificate (NSC) -

01) Can I Get Duplicate Certificate if my National Savings Certificate lost, stolen or destroyed?

- Yes, You can get a duplicate NSC from the post-office if it is lost, stolen or destroyed. The Procedure will be much more easy if you have a XEROX Copy of the Original Certificate.

02) What are the advantages of National Savings Certificate (NSC)? -

- National Saving Certificate is good for investment. The repayment is guaranteed by the Central Government. It gives interest at the rate of 8 per cent per annum. Interest is compounded on half under section 80 C of Income Tax Act. These are all the advantages of national saving certificates....advantages

1. government gurantee/less risk
2. tax saving
3. may get bank loan on nsc               disadvantages    1. long

03) Can you please tell me could i collect information of my national saving certificate i.e it is whether matured or not .?

- About NSC, only the post office issuing the certificate can suggest.There is no provision of on-line status or through other media

04) How to become national savings certificate agent?

- In every district there is a National Savings Organisation. It has its own offices. Generally they are given space with the District Magistrates campus. You have to make enquiry and consult the local officer.