What is National Savings Certificate ?
National Savings Certificate is an Investment alternative developed by Government of India with an intention to induce persons to a saving habit and to develop National Savings. National Savings Certificate is issued through Post Offices; they are the nodal agency which makes it available to the common public.
National Saving Certificates in India is ranked as ‘highly secured’ in the class of Investments. It is an Investment’ which has Tax Advantage while (i) Investing, (ii) during the life and (iii) at the time of maturity of the Investment.
The enactments of parliament which governs National Saving Certificates in India are The Post Office National Savings Certificates Ordinance, 1944, National Savings Scheme, 1992 and NSC (VIII) Issue Rules, 1989.
Features of NSC Saving Cretificate:
- National Savings Certificate is available in denominations of 100, 500, 1000 and 10000. This means that, an investment in NSC India can be done even with Rs. 100/-.
- There is no upper Limit to invest in National Savings Certificate. This means you can invest in NSC India any amount of money as there is no ceiling limit for investment.
- The maturity period of NSC India is 6 years.
- The Rate of Interest on NSC India is 8% p.a. cumulated half yearly.
- Pre closure is available for National Savings Certificate after the completion of 3 years.
- On payment of nominal fees, National Savings Certificate can be transferred to any person. Transfer from one branch to another is also possible.
Advantages of National Saving Certificate
- National Saving Certificates in India are Highly Secured Investment, since it is secured by Govt. of India.
- National Savings Certificate has a guaranteed rate of return of 8% p.a. (cumulated half yearly)
- National Saving Certificates in India are easily available from all post offices, in denominations of Rs. 100/-
- The principal amount which is invested in NSC India is eligible for tax benefit under 80C
- Interest which accrues all through the life of National Savings Certificate will be deemed to be re invested, and therefore Accrued interest on NSC will also be considered as invested in National Savings Certificate and therefore the interest accrued will be eligible for benefit under 80C.
- The interest received at the time of maturity from National Saving Certificates in India will not be subjected to TDS.
- NSC India Deposits will not be considered as assets U/s 2 (ea) of Wealth Tax Act 1957.
How to Start an NSC?:
Following are the conditions to purchase a National Saving Certificates in India:
- Should be an Indian Resident
- Should be an Individual or Trust
If you satisfy the above two conditions, then you may approach your nearest Indian Post Office and make a requisition for the same. Investment in NSC India can be made in the name of Single Holder, Joint name or in the name of Minor Child.