Here in this post, we are going to explain every detail about the NSC (National Saving Certificate),
What Is NSC?
National Saving Certificate is the fixed income saving scheme for the mid and low size investors with the tax benefits up to 1.5 lakhs under the section 80c of the income tax act.
NSC is a low-risk investment by the government where your return is guaranteed. Currently, the government is offering a 6.8% interest per annum on NSC investment, and it comes with five years of maturity period.
Type Of NSC
Perilously NSC comes in two variations,
- NSC VIII issue for 5 years
- NSC IX issue for 10 years
But later, the government discontinued the NSC IX issue, so now only the NSC VIII issue remained.
How To Apply For NSC
NSC is only for the Residents Of Indian. NRI, or HUF (Hindu United Families) are not allowed.
To apply for the NSC, you have to visit your nearest post office.
NSC Interest Rate
Currently, NSC is offering 6.8% of return per annum as of 1 April 2020. Each year as on 1 April, the government revised the return rate for the fiscal year. You can Calculate your NSC Maturity Amount with these NSC Calculators.
NSC Application Forms For Different Purposes
- Form 1 (Form A Or NC-71): To apply for a new NSC certificate
- NC-32: To transfer certificate from one post office to others
- NC-34: To transfer the certificate from one person to another. If you need to transfer the NSC as a form of a pledge, then this form will not work.
- NC-41: To pledge the certificate as security
- Nomination Form: To add a nominee while applying for NSC
- NC-51: if you didn’t add a nominee while applying for the NSC, but later you want to add.
- NC-29: To get a duplicate certificate in case the original is lost, stolen, or misplaced.
- NC-54 (a): This is a Bond of Indemnity compulsory to be submitted with form NC-29.
- NC-54 (b): This is a Bond of Indemnity form along with a Bank Guarantee that should be submitted alongside NC-29 when applying for a duplicate form.
- NC-61: This Bond of Indemnity has to be executed when the original certificates are to be discharged, or in case of issuance of a duplicate certificate if the original has been lost, misplaced, spoilt, destroyed, defaced, or mutilated. This form has to be submitted if the original certificate is missing when executing them.
Required Documents For NSC
To Buy A NSC
- One ID Proof
- One Address Proof
- NSC application form
- Any witness
- One photograph
For Encashment On Maturity
- Original NSC Certificate
- NSC Encashment form (Get from any nearest Post Office or download from Post Office Official site)
- Any ID Proof such as Aadhar, voter ID, etc
Note: if NSC Certificate is purchased on behalf of the minor, then in this case attestation by a guardian is mandatory
For Encashment Before Maturity
NSC does not allow premature encashment until it is a special case like death Of Certificate Holder, court order, or forfeiture by a pledge by any Government Office.
Where Will You Receive The Maturity Money
You have two options, you can get the final maturity amount in cash or can transfer to your personal savings account.
What If You Don’t Withdraw The NSC On Maturity?
If in case you do not withdraw the NSC on maturity, then you will earn a return (interest) on the total amount at the rate of the Post Office saving account till the next two years from the day of maturity. After two years, there will be no interest.
- It is not for the NRI (Non-Resident Indians) or trust.
There are three types of NSC certificates.
- Single Holder: Only issue to the one person
- Joint A: Certificates can be issue to 2 adults and will be payable to both
- Joint B: Certificates can be issue to 2 adults but payable to either one
- Certificates can be purchased from the post office, or by an authorized agent.
- Only issued in denominations of Rs.100/500/1000/5000/10,000
- NSC accepts different payment methods like cash, cheque, or demand draft.
- The certificate must be issued immediately once the payment is made.
- NSC can be transferred from one post office to another, or from one person to other
- The transfer request is only possible if the transferee is eligible to buy a certificate. And in case NSC is less than one year old, then the transfer is not possible.
The NSC can be allowed for the transfer as security to the following:
- President of India
- Reserve Bank of India
- Any scheduled bank
- Any local authority
- Cooperative society
- Housing Finance Company
- Certificate holders can apply for the duplicate certificate in case the original is stolen, lost, or misplaced. To apply for the duplicate certificate, you have to visit the post office where you registered it.
- After maturity, you can withdraw the total amount or can reinvest it.
- An account can be closed after three years from the date of the last deposit. If the account holder dies, the account can be closed at any time of his or her demise.
- You can not apply for more than one nominee, except NSC have the denomination of Rs. 500 or above.
NSC Tax Benefits
The original invested money on NSC will be tax-free, and you can save tax up to 1.5 lakhs under section 80c of the income tax act. Also, for the first four years, you can get a tax rebate on the interest earned on the investment.
On maturity, you just need to give tax on the total interest you earned over time.
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