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Is nsc ownership transferable to others?

Kavita (CA Job) (51 Points)

04 October 2013

I have National Saving Certificate on my name and claimed deduction under Section 80C also.

Read that I Can transfer/gift them to my Mother/Father/Brother/Sister?

What are the tax implications?( for me and transferee)

Will I still have to pay tax on interest after maturity?

I plan to buy NSC every year say for Rs.50K hold it for an year and claim deduction for that FY. Then transfer it to my mother who is just a house wife with no income. This way I can save little tax. Currently I give her cash directly.

You suggestions are welcome!!!

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2 Replies

Mihir (Wealth Manager) (5293 Points)
Replied 04 October 2013

Minimum investment Rs. 500/- No maximum limit.
Rate of interest 8.5% compounded half yearly.
Rs. 1000/- grow to Rs. 1601/- in six years.
Two adults, Individuals, and minor through guardian can purchase.
Companies, Trusts, Societies and any other Institutions not eligible to purchase.
Non-resident Indian/HUF can not purchase.
No pre-mature encashment.
Annual interest earned is deemed to be reinvested and qualifies for tax rebate for first 5 years under section 80 C of Income Tax Act.
Maturity proceeds not drawn are eligible to Post Office Savings account interest for a maximum period of two years.
Facility of reinvestment on maturity.
Certificate can be pledged as security against a loan to banks/ Govt. Institutions.
Facility of encashment of certificates through banks.
Certificates are encashable any Post office in India before maturity by way of transfer to desired post office.
Certificates are transferable from one Post office to any Post office.
Certificates are transferable from one person to another person before maturity.
Duplicate Certificate can be issued for lost, stolen, destroyed, mutilated or defaced certificate.
Nomination facility available.
Facility of purchase/payment to the holder of Power of attorney.
Tax Saving instrument - Rebate admissible under section 80 C of Income Tax Act.
Interest income is taxable but no TDS
Deposits are exempt from Wealth tax.