National Savings Certificates (India)

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File:India 1953 50R Post Office National Savings Certificate front and back.jpg
Both sides of 1953 50R Post Office National Savings Certificate.

National Savings Certificates, popularly known as NSC, is an Indian Government Savings Bond, primarily used for small savings and income tax saving investments in India. It is part of the postal savings system of Indian Postal Service (India Post).

These can be purchased from any Post Office in India by an adult (either in his/her own name or on behalf of a minor), a minor, a trust, and two adults jointly. These are issued for five and ten year maturity and can be pledged to banks as collateral for availing loans. The holder gets the tax benefit under Section 80C of Income Tax Act, 1961.[1][2][3]

Other similar government savings schemes in India include: Public Provident Fund (PPF), Post Office Fixed Deposit, Post Office Recurring Deposit, etc.[4]

Online Tools

There are various tools available online for calculating maturity amount.

History

The certificates were heavily promoted by the Indian government in the 1950s after India's independence, to collect funds for "nation-building".[5]

Investment and returns

For NSC VIII issue

There is no maximum limit for investment. Certificates can be kept as collateral security to get loan from banks. Investment up to INR 1,50,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act. Trust and HUF cannot invest. Rate of interest effective from 1st April 2013 is 8.50% which was revised on 26th March 2013 from 8.6% which was effective from 1st April 2012.[6][6] Maturity value of a certificate of INR.100/- purchased on or after 1.4.2014 shall be INR. 151.62 after 5 years. However, Interest earned on NSC is taxable under IT Act, 1961.

For NSC IX issue

This issue has been discontinued since 20th December 2015.

There is no maximum limit for investment. INR. 100/- grows to INR 234.35 after 10 years. Minimum investment is INR. 100/-. The instrument is available for investment in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-. A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor. Rate of interest effective from 1st April 2013 is 8.80% which was revised on 26th March 2013 from 8.9% which was effective from 1st April 2012.[6]

References and sources

References
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External links

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