National Savings Certificate 2024 (NSC): Interest Rate, Tax Benefits, Eligibility

National Savings Certificate (NSC), a fixed-income investment plan offered by the Government of India. It is a savings bond program designed to encourage investors, mainly those with modest to moderate incomes, to make investments and take advantage of Section 80C income tax benefits. It is simple to open at any post office. The Indian government supports the NSC plan, which is accessible at all NSC post offices. Owing to the large number of post offices in India and their convenient location, the program has gained a lot of popularity there. Read the complete post to get complete information related to the National Savings Certificate.

National Savings Certificate

National Savings Certificate 2024

The Indian government introduced a fixed-income investment scheme called the National Savings Certificate (NSC). It attempts to incentivize users most of whom are low- to mid-income investors to invest in addition to helping them save taxes. Through your local post office, you can make an NSC investment in your name, jointly, or on behalf of a juvenile. The NSC has a five-year maturity period. Since the program was designed primarily for individuals, Hindu Undivided Families (HUF) and non-resident Indians (NRIs) are ineligible to participate in it. The NSC scheme would only accept investments from Indian nationals.

Post Office RD Scheme

NSC Certificate Objective

The program’s primary goal is to encourage people to save low to medium amounts of money, and tax incentives are offered in exchange for these efforts. The Indian government encourages participation in the system, thus there are fewer risks associated with doing so.

National Savings Certificate Modes of Holding

The following are the various ways that National Savings Certificates can be held:

  • Single Holder Type Certificate: An adult investor may obtain a single holder certificate for themselves or on behalf of a juvenile or mentally incapacitated individual. After turning ten years old, a minor may also acquire it.
  • Joint A Type Certificate: Three investors may hold this certificate in this scenario, each receiving an equal portion of the maturity funds.
  • Joint B Type Certificate: Three investors may hold one of these certificates, which is called a joint holding certificate. Nevertheless, only one of the holders receives the maturity profits.

Features & Benefits of National Savings Certificate 2024

Some of the key features and benefits of the National Savings Certificate are as follows:

  • A five-year fixed maturity period is available for easy purchase of National Savings Certificates at any Indian Post Office.
  • The minimum needed amount to invest in a National Savings Certificate is Rs. 1000 (and in multiples of Rs. 100), and there is no maximum.
  • The principal invested is eligible for tax savings up to Rs. 1.5 lakh yearly under Section 80C of the Income Tax Act, 1961.
  • The Ministry of Finance may declare periodic changes to the interest rate.
  • Annual compound interest is paid out only at maturity, with no TDS deducted.
  • Released in values of INR 100, INR 500, INR 1000, INR 5000, INR 10,000.
  • As collateral or security against secured loans, National Savings Certificates are duly accepted by all major banks and NBFCs.
  • In the event of the investor’s unexpected death, they may designate any member of their family minors are also eligible to receive their NSC investments.

Post Office Monthly Income Scheme

Eligibility Criteria for National Savings Certificate 2024

The applicants applying for National Savings Certificate must fulfill the following eligibility criteria:

  • Investing in NSCs is open to all Indian residents.
  • Indians who are not residents are not allowed to buy new NSCs. NSCs can, however, be held till maturity if resident subscribers turn NRI before the certificates mature.
  • NSCs can be purchased by adults acting alone or in concert (up to three adults), guardians acting on behalf of a child or mentally incapacitated person, or minors above the age of ten.
  • NSC investments are not permitted for Hindu Undivided Families (HUFs) or trusts.
  • Only in his name may Karta of HUFs invest in NSCs.

Required Documents for National Savings Certificate 2024

Some of the important documents required for a National Savings Certificate are as follows:

  • Photograph
  • NSC Application form
  • Identity proof like passport, permanent account number (PAN) card, older people ID, driver’s license, etc
  • Address proof, like electricity bill, phone bill, passport, bank statement, etc    

Tax benefits of investing in National Savings Certificate

The maximum amount that can be invested in NSC is unlimited, however, under Section 80C of the Income Tax Act of 1961, subscribers are only eligible for tax rebates on contributions up to Rs. 1.5 lakh annually. Additionally, the interest received on the certificates qualifies for a tax deduction and is added back to the original investment. In addition, subject to an annual cap of 1.5 lakh, the interest earned on NSC is furthermore presumed to be reinvested for the first four years, making it eligible for a tax credit. However, the interest is taxed at the investor’s applicable slab rate in the fifth year as it is not reinvested.

Post Office Time Deposit Scheme

Steps to Invest in National Savings Certificates Offline

NSC can be purchased at any Indian Post Office after the necessary KYC documentation is submitted. The fundamental steps for investing in National Savings Certificates are as follows:

  • Complete the NSC application form, which may be found at all Indian post offices and online.
  • Send in self-attested copies of the necessary KYC paperwork. For additional verification, you also need to bring the original paperwork.
  • Pay the amount that has to be invested using a cheque or cash.
  • NSCs for the relevant amounts will be produced after the purchase of certificates is completed and may be picked up from the post office.

Steps to Apply for National Savings Certificates Online

To Apply for National Savings Certificates Online, the user needs to follow the below given steps:

  • First of all, Open the Department of Posts (DOP) net banking website.
  • Login to your account
  • Now, under the General Services tab, click on the Service Requests option
  • After that, click on the New Requests
  • Then, select the NSC Account – Open an NSC Account (For NSC)
  • A new page will open
  • Now, enter the deposit amount and select the debit account linked to the PO savings account
  • Accept the terms and conditions
  • Now, enter the transaction password and click on the Submit button
  • It will be possible to examine and download the deposit receipt.
  • Click Accounts after logging in to see your NSC account details.

National Savings Certificate Transfer

NSCs can be transferred between post offices and between individuals without affecting the original certificate’s maturity or interest accrual. Investors with National Savings Certificates can transfer funds in the following ways:

  • To transfer savings certificates from one post office to another, complete the Application for Transfer of Savings Certificates form and send it to the post office that originally issued the certificate.
  • The Application for Transfer of Savings Certificate from Person to Person Under Specified Conditions form must be completed at the NSC issuing post office to transfer a National Savings Certificate from one holder to another. Up until the scheme’s maturity, this can only be done once.

Issue of National Savings Certificates Copy

A copy of the original NSC certificate can be issued if it is misplaced, stolen, damaged, vandalized, or otherwise altered. Simply complete the Duplicate Savings Certificates form and mail it to the post office that issued the NSC that needs to be replaced. Important form fields are as follows:

  • Information on the certificate(s), including denominations, serial numbers, NSC issues, etc.
  • The date of purchasing of the certificates
  • Along with other information, the cause for the duplicate certificate application must be stated.

Early Withdrawal

NSC-VIII has a five-year lock-in period, and early withdrawal is only allowed under certain circumstances, like:

  • Upon the NSC holder’s passing.
  • Regarding the court’s ruling for the NSC to withdraw prematurely
  • Upon forfeiture by a government officer listed in the gazette as the pledgee.
FAQ’s
What are the NSC scheme’s income tax benefits?

Under Section 80C of the Income Tax Act of 1961, investments in NSC are eligible for tax benefits of up to Rs. 1.5 lakh. Furthermore, for tax purposes, the yearly interest earned on NSC assets is regarded as a fresh investment. Tax on the interest generated must be paid; TDS is not required on NSC.

Can one buy a certain number of NSCs?

The amount of NSCs that can be purchased is not limited. Nonetheless, a minimum investment of Rs. 1000 is needed to make an NSC.

What is the duration needed for the NSC to double?

The amount invested and the interest rate determine how long a National Savings Certificate must double.

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