Friday, 1 June 2018

National Saving Certificate (NSC) | How to buy NSC


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National Saving Certificate (NSC) | How to buy NSC

National Saving Certificate is an Indian Government saving bond, popularly known as NSC. NSC is primarily used for small savings and income tax saving investments in India. It is part of the postal saving system of Indian Postal Services (India Post). It can be purchased from any Post Office in India by an adult (either in his/her own name or on behalf of a minor) and two adults jointly. These can be pledged to banks as collateral for availing loans. The holder gets the tax benefit under Section 80C of Income Tax Act, 1961. In this post, let’s take a look at how to buy National Saving Certificate.


Document required for the purchasing National Saving Certificate 

Following documents required for purchasing a fresh set of National Saving Certificates
1. The application form for the investment
2. Proof of identity
3. Proof of address
4. Copy of PAN card
5. Two passport size photographs



How to buy National Saving Certificate?

Buying a National Saving Certificate is a very simple process. National Saving Certificate can be bought from any post office and will require the submission of some documents as mentioned above. To buy NSC you have to fill an application form which you will get from the post office itself. Fill this application form and submit it along with the required documents. Make the payment for the amount you want to invest. This payment can be made in cash or via cheques, pay order or demand draft drawn in favour postmaster. After the verification, the postmaster will give you the National Saving Certificates printed or entered manually in a pass book. If payment is made via a cheque then the certificate will only be issued upon the realisation of the payment made.



Minimum and Maximum Investment

You have to invest a minimum amount of Rs 100 in the National Saving Certificate scheme. There is no such limit for maximum investment. However, the tax deduction can be claimed of maximum amount of Rs 1.5 lakh invested in a single financial year.

Also read: 7 Investments for Tax Free Income in India

Benefits of National Saving Certificate 

1. It is a risk free investment as it is a government scheme.
2. This scheme is specially designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses.
3. No maximum limit for investment.
4. No Tax deduction at source.
5. Certificates can be kept as collateral security to get loan from banks.
6. The rate of interest is also high as compare to current fixed deposit rates of various banks.
7. It can be purchased anywhere in India from a post office and can be transferred to another post office.
8. Nomination facility is available. In case of death, the nominee shall be entitled for the maturity amount.
9. The rate of interest does not change, it remain fixed over the life of NSC.
10. Maturity value of a certificate of INR.100/- purchased on or after 01.10.2018 shall be INR. 146.93 after 5 years.


Tax Benefit on National Saving Certificate 

You can avail a tax deduction of Rs 1.5 lakh for investment in NSC under Section 80C of Income Tax Act. The interest accrued every year on NSC also qualifies for tax exemption u/s 80C.

Nomination in National Saving Certificate 

You can also nominate anyone in your NSC. Nomination can be done at the time of purchasing the NSC in application form or at any time before the redemption. You can also change nomination at any time before the redemption. The person so nominated shall be entitled to claim the maturity value in case the certificate holder dies before the maturity date.

Transfer of National Saving Certificate 

National Saving Certificate (NSC) can be transferred from one person to another. However, the transfer of NSC is allowed only once.


Interest on NSC in Income Tax Returns (ITR)

To avail the tax benefit on accrued interest, it is important to declare the same every year in your income tax return (ITR) form under the head “Income from Other Sources”.



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National Saving Certificate (NSC) | How to buy NSC




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