Until now, most of the small savings schemes were sold through post offices only. Citizen Savings Scheme. Dear Sadan, NSC are not inflation-indexed. NSS are different ones. Dear sir I have lost my KVP certificates issued long back in , I visited post office, officials refused to provide any help in the absence of certificates. Dear Dilip.. Hi Sreekanth, Is it possible to increase the investment every month in NSC or is it a one time payment only. Thanks, Mani. Dear Mani, You can buy new certificates every time..
An immediate response would be of great help. I will wait for your kind guidance on this. Thank you in advance. Regards, A Kaur. Please advice…. Dear Sudhakar.. You can take a copy of Passbook statement.. Hello Srikanth, I got kvp from agent 1 year back. How to check that bond is original or not.
Regards, Satheesh. Dear Satheesh.. Address proofs such as Aadhar card, Voter ID card, Passport, Utility bills such as water, electricity, gas etc Cheque or cash if payment is to made through offline modes.
Some of the key benefits and features of the National Savings Certificate are listed as follows: Investments made in NSC involve low risk and are highly secured, due to the fact that the government of India backs the funds. However, investments made in NSC must be in multiples of NSC allows the investment of funds for a tenure of 5 or 10 years. NSC offers a high return on the invested amount, due to the NSC interest rate that currently stands at 6.
This interest, however, is payable to the investors at the time of maturity with the NSC maturity value. NSC savings scheme is not only an investment but also allows individuals to take a loan against it. NSC provides the benefit of tax exemption of up to Rs 1.
In case an individual dies during the NSC savings tenure, then the investment can easily be transferred to another family member or the nominee. Though premature withdrawal from the NSC certificate is not allowed. However, under certain circumstances, one can withdraw funds partially from the NSC investment. It can be done due to the demise of the actual investor or as per the court orders. As far as the interest rate is concerned, the interest earned in the first four years of the investment tenure is exempted for tax and allows a further deduction as per section 80C.
It is because the interest earned during these four years is considered as reinvestment with the principal amount. The interest earned in the fifth year is not reinvested; thereby, it is taxable as per the income tax slab. Know More Saving Schemes. Yes, the lock-in period with Investment in NSC is five years. Related Topics. Home Loan Home Loan at all-time low rates starting at 6. Personal Loan Instant Personal Loan starting at Check Offers.
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As a low-risk investment, it comes with a host of benefits. We have covered the following in this article:. The National Savings Certificate NSC is a fixed income investment scheme that you can open with any post office branch. The scheme is a Government of India initiative. It is a savings bond that encourages subscribers — mainly small to mid-income investors — to invest while saving on income tax.
You can buy it from the nearest post office in your name, for a minor or with another adult as a joint account.
NSC comes with a fixed maturity period of five years. There is no maximum limit on the purchase of NSCs, but only investments of up to Rs. The certificates earn a fixed interest, which is currently at a rate of 6. The interest rate is revised on a regular basis by the government. Anyone looking for a safe investment avenue to earn a steady interest while saving on taxes can choose to invest in NSC. NSC offers guaranteed interest and complete capital protection. However, like most fixed income schemes, they cannot deliver inflation-beating returns like tax-saving mutual funds and the National Pension System.
The government has made NSC easily accessible for prospective investors by making it available in post office branches spread across the country. The government has promoted the National Savings Certificate as a savings scheme for individuals.
The scheme is open only for individual Indian resident citizens. Investments of up to Rs 1. Furthermore, the interest earned on the certificates is also added back to the initial investment and qualify for a tax break as well. For instance, if you purchase certificates worth Rs 1,, you are eligible for a tax rebate on that initial investment amount in the first year.
But in the second year, you can claim a tax deduction on the NSC investment s that year as well as the interest earned in the first year. This is because the interest is added to the original investment and compounded annually.
The table below compares NSC with other tax-saving investments:. Now that you have some knowledge of NSC, is this scheme for you? If you are looking for capital protection and tax deductions under Section 80C, you can consider investing in NSC. NSC, i. The interest earned on the principal amount is treated as a re-invested in NSC. Since the Government of India backs the scheme, the interest rates are uniform across all post offices.
The NSC interest rates are regulated by the Government every quarter. The current NSC interest rate is 6. With the compounding of interest, the returns are automatically reinvested but still do not beat inflation. NSC can be transferred from one post office to another. It can also be transferred to another individual. The certificate will be the same, the name of the old owner will be rounded and the name of the new owner will be mentioned.
The principal investment amount invested is allowed as a deduction under section 80C The deduction is limited up to Rs. Hence it is allowed as a deduction under section 80C up to Rs 1. The interest earned is first added to the total income of the investor and then allowed as a deduction. Hence, tax is also deducted on the interest earned. According to the withdrawal rules, the NSC investments cannot be withdrawn before the maturity period.
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