A Government of India initiative, the National Savings Certificate (NSC) is a fixed-income investment scheme that you can open easily with any post office.
National Savings Certificate is a savings bond scheme that encourages subscribers, primarily small to mid-income investors, to invest while saving on income tax under Section 80C.
Here are some of the significant features of NSC scheme-
The NSC offers guaranteed interest and complete capital protection, just like some other fixed income instruments - Public Provident Fund and Post Office FDs. However, they cannot deliver inflation-beating returns like tax saving Mutual Funds and National Pension Systems.
Basically, the Government has promoted the National Savings Certificate as a savings scheme for Indian individual citizens.
Below is the list of NSC eligibility criteria that are required to invest in NSCs-
You can invest in NSC through online and offline modes. Here is the procedure-
To invest in NSC offline, follow the listed steps:
Step 1: Collect the NSC application form online or at any post office.
Step 2: Fill out the form with all the details.
Step 3: Submit the form with self-attested copies of the required KYC documents.
Step 4: Take the original documents for verification and pay the amount you want to invest.
Step 5: Upon approval, collect the NSC of your application.
Step 1: Open Department of Posts (DOP) net banking and log in.
Step 2: Under 'General Services', select 'Service Requests'.
Step 3: Click on 'New Requests' and choose ‘NSC Account – Open an NSC Account (For NSC)’.
Step 4: Enter the deposit amount and choose the debit account linked to the PO savings account.
Step 5: Choose ‘Click Here’ to run through the terms and conditions. Accept them once done.
Step 6: Enter the transaction password and click on ‘Submit’.
Step 7: The deposit receipt will be there to view and download.
Step 8: Login and click on 'Accounts' to view the details of your NSC account.
Below are the documents required to be submitted in order to invest in an NSC-
Though there is no maximum limit on the purchase of NSCs, only investments of up to Rs 1.5 lakh annually can earn the subscriber tax savings under Section 80C of the Income Tax Act, 1961.
Additionally, the interest earned on NSC annually, for the 1st 4 years are deemed to be reinvested ( ie. added back to the initial investment) and hence, also eligible for a tax break, subject to the overall annual limit of 1.5 lakh. However, the interest earned in the 5th year is not re-invested hence taxable as per the investor’s applicable slab rate.
Currently, the NSC interest rate is 7.7% , which is applicable for the current quarter.
If your original NSC certificate is lost, stolen, destroyed, damaged, or mutilated, you can request a replica.
Simply fill out the Duplicate Savings Certificates form and return it to the post office that issued the NSC that needs to be replaced.
The form's key fields are as follows-
Along with other information, the purpose for applying for a duplicate certificate must be stated.