National Savings Certificates (NSCs) are popular as Tax Saving instruments. NSC scheme has been designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses. NSCs are a long term tax saving option for investors Loan is available form banks against pledge of NSCs in their favour. The amount invested in qualifies for tax benefits under Section 80 C of Income Tax Act. The accrued interest also qualifies for benefits of Section 80C. However, the interest accrued on NSCs is taxable.
Changes in the scheme:
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Parents and guardians can also purchase NSCs on single holder basis on behalf of a minor.
Non residents cannot invest in NSCs. If a Resident in India having purchased a certificate, subsequently becomes Non-Resident during the currency of the maturity period, the certificate shall be encashed or deemed to be encashed on the day he becomes a non-Resident, and interest shall be paid at the rate applicable to the Post Office Savings Account, from time to time, from such day and up to the last day of the month preceding the month in which it is actually encashed.
|Period||VIII Issue||IX Issue|
|01.12.2011 to 31.03.1012||8.40%||8.70%|
|01.04.2012 to 31.03.2013||8.60%||8.90%|
|01.04.2013 to 19.12.2015||8.50%||8.80%|
|20.12.2015 to 31.03.2016||8.50%||Discontinued|
|01.04.2016 to 30.09.2016||8.10%||-|
|01.10.2016 to 31.03.2017||8.00%||-|
|01.04.2017 to 30.06.2017||7.90%||-|
|01.07.2017 to 31.12.2017||7.80%||-|
|01.01.2018 to 30.09.2018||7.60%||-|
|01.10.2018 to 30.06.2019||8.00%||-|
|01.07.2019 to 31.03.2020||7.90%||-|
Application for Cancellation or Variation of Nomination previously made be submitted on form NC-53.
The certificate can also be transferred from one person to another with the previous consent of the Postmaster or the Head Postmaster by submitting application NC-34. The transfer can be made after expiry of a period of at least one year from the date of the certificate.
On an application being made in the prescribed Form by the transferor and transferee, the Postmaster may permit the transfer of any certificate (pledging of certificate) as a security.
The transfer is permitted only for the whole amount and not for the part of it.
Transfer of the Certificate purchased on behalf of minor is permitted only if his guardian certifies that the minor is alive and the transfer is for the benefit of the minor.
The Certificate can be encashed at the Post Office at which it stands registered or it at any other Post Office subject to satisfactory verification of the identity of the presenter.
In case of certificates purchased on behalf of a minor who has since attained majority, the certificate shall be signed by such a person himself, but his signature shall be attested either by the person who purchased the certificate on his behalf or by any person who is known to the Postmaster.
In case of death of the holder, in respect of which a nomination is in force, the nominee or nominees are entitled to encash the Certificate at any time before or after the maturity.
If the Certificate is encashed within one year from the date of certificate, only the face value of the Certificate shall be payable.
If the certificate is encashed after expiry of one year but before the expiry of three years from the date of certificate, an amount equivalent to the face value together with simple interest at POSB rate is payable.
The amount payable after expiry of three years from the date of the certificate (VIII issue) is as under:
|Period lapsed from the date of certificate||Amount Payable|
|Purchased before 30.11.2011||Purchased during 01.12.2011 to 31.03.2012||Purchased after 01.04.2012|
|> 3 years < 3 years and 6 months||121.15||123.14|
|> 3 years and 6 months < 4 years||125.09||127.49|
|> 4 years < 4 years and 6 months||129.16||131.99|
|> 4 years and 6 months < 5 years||133.36||136.65|
|> 5 years < 5 years and 6 months||137.69||Not Applicable|
|> 5 years and 6 months < 6 years||142.16||Not Applicable|
No TDS is deducted on repayment.
No tax deduction at source.
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