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NSC – National Saving Certificate

National Saving Certificate, commonly known as NSC, is saving bonds issued by Indian Government to individuals only. It is primarily focused on small savings. Also, the amount invested in NSC, can be claimed as tax deduction investment u/s 80C of Income Tax Act, 1961 subject to limit specified.

Features of NSC VIII Issue

  1. Certificate are issued at Par.
  2. Minimum investment is of Rs 100. Available denomination are Rs 100, Rs 500, Rs 1,000 & Rs 10,000.
  3. Amount invested in NSC can be claimed as investment u/s 80C. Also the accrued interest on NSC will qualify for investment u/s 80C.
  4. There is no maximum limit of investment.
  5. Maturity period is of 5 years.
  6. Interest rate of 8.50% compounded semi-annually.
  7. No tax deduction as source (TDS).
  8. Only individuals are allowed to purchase investment. Trust, HUF etc are not allowed to make investment.
  9. Premature withdrawal is allowed only in special cases i.e.
    a) on the death of the holder or any of the holders in the case of joint holders
    b) on forfeiture by a pledgee being a Gazetted Government Officer when the pledge is in conformity with these rules
    c) when ordered by a court of law
  10. NSC can be pledge as collateral security for getting loan from bank.
  11. Value of investment with accrued interest on a certificate of Rs 100 denomination.
    YearAccrued InterestTotal Value
    18.68108.68
    29.43118.11
    310.25128.36
    411.14139.50
    512.11151.62
    Total51.62
  12. Only principal amount is repaid if the certificate is encashed within one year from the date of deposit. If the encashment is done after expiry of one year but before the expiry of 3 year from the date of deposit then simple interest is payable only for the complete month at the rate applicable from time to time to single accounts under Post Office Saving Account Rules, 1981. The following table represent the amount receivable after 3 years on premature withdrawal of a certificate of Rs 100 denomination
    Period from date of deposit Amount Receivable
    Three years or more but less than three years and six months124.24
    Three years and six months or more but less than four years128.81
    Four  year or more but less than four  years and six months133.56
    Four years and six month or more but less than five years138.48

    Complete details regarding NSC VIII can be downloaded from below:-
    NATIONAL SAVINGS CERTIFICATES (VIII-ISSUE) RULES, 1989
    NATIONAL SAVINGS CERTIFICATES (VIII-ISSUE) AMENDMENT RULES 2013

Features of NSC IX Issue

    1. Certificate are issued at Par.
    2. Minimum investment is of Rs 100. Available denomination are Rs 100, Rs 500, Rs 1,000 & Rs 10,000.
    3. Amount invested in NSC can be claimed as investment u/s 80C. Also the accrued interest on NSC will qualify for investment u/s 80C.
    4. There is no maximum limit of investment.
    5. Maturity period is of 10 years.
    6. Interest rate of 8.80% compounded semi-annually.
    7. No tax deduction as source (TDS).
    8. Only individuals are allowed to purchase investment. Trust, HUF etc are not allowed to make investment.
    9. Premature withdrawal is allowed only in special cases i.e.
      a) on the death of the holder or any of the holders in the case of joint holders
      b) on forfeiture by a pledgee being a Gazetted Government Officer when the pledge is in conformity with these rules
      c) when ordered by a court of law
    10. NSC can be pledge as collateral security for getting loan from bank.
    11. Value of investment with accrued interest on a certificate of Rs 100 denomination.
      YearAccrued InterestTotal Value
      18.89108.89
      29.68118.57
      310.54129.11
      411.48140.59
      512.50153.09
      613.61166.70
      714.82181.52
      816.13197.65
      917.57215.22
      1019.13234.35
      Total134.35
    12. Only principal amount is repaid if the certificate is encashed within one year from the date of deposit. If the encashment is done after expiry of one year but before the expiry of 3 year from the date of deposit then simple interest is payable only for the complete month at the rate applicable from time to time to single accounts under Post Office Saving Account Rules, 1981. The following table represent the amount receivable after 3 years on premature withdrawal of a certificate of Rs 100 denomination
      Period from date of depositAmount Receivable
      Three years or more but less than three years and six months123.14
      Three years and six months or more but less than four years127.49
      Four  year or more but less than four  years and six months131.99
      Four years and six month or more but less than five years136.65
      Five years or more but less than five years and six months143.81
      Five years and six month or more but less than six years149.31
      Six years or more but less than six years and six months154.65
      Six years and six month or more but less than seven years160.37
      Seven years or more but less than seven years and six months166.30
      Seven years and six month or more but less than eight years172.46
      Eight years or more but less than eight years and six months178.84
      Eight years and six month or more but less than nine years185.46
      Nine years or more but less than nine years and six months192.32
      Nine years and six month or more but less than ten years199.43

      Complete details regarding NSC IX can be downloaded from below:-
      NATIONAL SAVINGS CERTIFICATES (IX-ISSUE) RULES 2011

About Rohit Pithisaria

Rohit Pithisaria is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He is actively writing from very beginning of his professional career and is author of various tax articles and blogs.

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