National saving certificate
National saving certificate (NSC) is a government savings scheme or bond, primarily use for small savings and income tax saving investment under postal saving system of the Indian postal department.
Indian goverment have introduce national saving certificate to encourage small or mid-income investor .
This scheme is tax free.
Interest on NSC is tax free under section 80c of income tax act 1961.
There are many other similar types of investment provided by our government are :-
Public provided funds, Fixed deposit and Recurring deposit in postal department.
To read more such articles, visit Company Vakil
Objectives of NSC
Nsc helps people to achieve their financial goal for many purposes.
For saving income for future investment ,
House loan ,car loan or education purpose saving.
The main of purpose of NSC is to allow open investment of people by saving their income tax.
Advantage of NSC
Tax free investment
The Interest rate is 8% higher than other investment
Low risk, provide secured investment.
Helps in future savings.
The Holder can take a loan against NSC when urgently needed.
Provides long term investment of 5 years up to 10 years.
Features of NSC
Provides fixed income around 8% interest annually.
NSC certificate can be purchased by an individual or as joint investment.
This investment is only for an individual only, group of people like trust, companies or Hindu unified families are not eligible.
If investing in the name of minor a representative or guardian of the minor have to apply together jointly.
Minimum amount of investment is 100rs.
Types of NATIONAL SAVING SCHEME
Two types of NSC has been introduced by our government:-
NSC issue VIII and NSC issue IX.
Benefits of NSC ISSUE VIII :–
Denomination range is from 100 Rs up to 10000Rs.
Any individual can obtain this scheme
HUFs are not eligible for this scheme
Maturity period is up to 5 years.
If invested Rs 100, it’s grows upto 146.99rs every year.
It is compounded annually but payable at maturity.
There is no upper limit of investment.
Benefits of NSC ISSUE IX :–
This Scheme has been discontinued from 25thdecember 2015.
Denomination range was from 100 to 10000rs.
Interest rate was about 8.80% to 10% annually but payable after 10 years.
Maturity period was 10 years.
Types of account holder
Joint A:- same certificate issued to two adult holders.
Paid to both the holders on maturity.
For cancellation, transfer, or for nomination signature of both the holders required.
Joint B:- same certificate issued to two holders,
But payment of maturity value is different.
Maturity value will be paid to one of the account holder.
Single holder :- An individual holder can apply or an adult on the behalf of a minor.
It enables individual to hold an account for himself.
Documents required :-
You have to be an account holder or have to open a personal savings account in post office.
Identity proof:- PAN CARD, ADDHAR CARD, VOTER CARD,RATION CARD.
Address proof:- electricity bills, landline bills etc.
10th marks sheet or birth certificate.
2 passport size photograph.
How to apply for NSC
You can apply for NSC, by visiting any nearest post office.
Ask clerk or post master for application form.
Fill all the detail.
Submit documents required along with it.
After all the process one passbook and a certificate stating the maturity period and maturity value will be issued.
No application fee.
You have to pay 5rs for issuing the certificate.
Amount you want to invest on NSC, should be paid.