National Saving Certificates
This query is : Resolved
04 October 2007
What is NSC ? What is the meaning of 'periods' in respect of NSC ? Is the full name of NSC is National Saving Certificates ? How it is different from Kisan Vikas Patra (KVP) or Indira Vikas Patra (IVP) ?
04 October 2007
NSC is the National Savings Certificate which gets doubled in a period of 8 years and 7 months. It is different from Kisan Vikas PAthra & Indra Vikas Pathra in the context of Tax deduction available under Section 80 C. KVP is not eligible under 80 C.
NSC is a certificate issued by the Central Government and its payment is fully guaranteed by the Centre.
NSC is a certificate issued by the Central Government and its payment is fully guaranteed by the Centre.
05 October 2007
there are some periods in the context of NSC such as first period, second period, etc. and the rates of interest are different for each period. Please clear this point also.
19 November 2007
What is National Savings Certificate?
National Savings Certificates are certificates issued by Department of post, Government of India and are available at all post office counters in the country. It is a long term safe savings option for the investor. The scheme combines growth in money with reductions in tax liability as per the provisions of the Income Tax Act, 1961. The duration of a NSC scheme is 6 years.
Features
NSCs are issued in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 for a maturity period of 6 years. There is no prescribed upper limit on investment.
Individuals, singly or jointly or on behalf of minors and trust can purchase a NSC by applying to the Post Office through a representative or an agent.
One person can be nominated for certificates of denomination of Rs. 100- and more than one person can be nominated for higher denominations.
One can take a loan against the NSC by pledging it to the RBI or a scheduled bank or a co-operative society, a corporation or a government company, a housing finance company approved by the National Housing Bank etc with the permission of the concerned post master.
Though premature encashment is not possible under normal course, under sub-rule (1) of rule 16 it is possible after the expiry of three years from the date of purchase of certificate.
Tax benefits are available on amounts invested in NSC under section 80C, and exemption can be claimed under section 80L for interest accrued on the NSC. Interest accrued for first five years can be treated as fresh investment in NSC for that particular year and tax benefits can be claimed under section 80C.
Return
It is having a high interest rate at 8% compounded half yearly. Post maturity interest will be paid for a maximum period of 24 months at the rate applicable to individual savings account. A Rs 10000 denomination certificate will increase to Rs. 16012 on completion of 6 years.
Interest rates for the NSC Certificate of Rs 1000
Year Rate of Interest
1 year Rs 81.60
2 year Rs 88.30
3 year Rs 95.50
4 years Rs103.30
5 years Rs 111.70
6 years Rs 120.80
Advantages
Tax benefits are available on amounts invested in NSC under section 80C. Interest accrued for first five years year can be treated as fresh investment in NSC for respective year and tax benefits can be claimed under section 80C.
National Savings Certificates are certificates issued by Department of post, Government of India and are available at all post office counters in the country. It is a long term safe savings option for the investor. The scheme combines growth in money with reductions in tax liability as per the provisions of the Income Tax Act, 1961. The duration of a NSC scheme is 6 years.
Features
NSCs are issued in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 for a maturity period of 6 years. There is no prescribed upper limit on investment.
Individuals, singly or jointly or on behalf of minors and trust can purchase a NSC by applying to the Post Office through a representative or an agent.
One person can be nominated for certificates of denomination of Rs. 100- and more than one person can be nominated for higher denominations.
One can take a loan against the NSC by pledging it to the RBI or a scheduled bank or a co-operative society, a corporation or a government company, a housing finance company approved by the National Housing Bank etc with the permission of the concerned post master.
Though premature encashment is not possible under normal course, under sub-rule (1) of rule 16 it is possible after the expiry of three years from the date of purchase of certificate.
Tax benefits are available on amounts invested in NSC under section 80C, and exemption can be claimed under section 80L for interest accrued on the NSC. Interest accrued for first five years can be treated as fresh investment in NSC for that particular year and tax benefits can be claimed under section 80C.
Return
It is having a high interest rate at 8% compounded half yearly. Post maturity interest will be paid for a maximum period of 24 months at the rate applicable to individual savings account. A Rs 10000 denomination certificate will increase to Rs. 16012 on completion of 6 years.
Interest rates for the NSC Certificate of Rs 1000
Year Rate of Interest
1 year Rs 81.60
2 year Rs 88.30
3 year Rs 95.50
4 years Rs103.30
5 years Rs 111.70
6 years Rs 120.80
Advantages
Tax benefits are available on amounts invested in NSC under section 80C. Interest accrued for first five years year can be treated as fresh investment in NSC for respective year and tax benefits can be claimed under section 80C.
20 November 2007
Thanks for such clearance given by you on this topic. Plz consider my other queries also and try to respond in the same excellent manner.
24 November 2007
I highly appreciate the clarification of Omprakash Agarwalla.
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