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National Savings Certificates, popularly known as NSC, is an Indian Government Savings Bond, primarily used for small savings

and income tax saving investments


in India. It is part of the postal savings system of Indian Postal Service (India Post)This scheme was Launched by government in order to promote and encourage saving
habits among citizens and channelize these savings for the benefit of the country. One of the safest instruments Provides guaranteed return.
These can be purchased from any Post Office in India by an adult (either in his/her own name or on behalf of a minor), a minor, a trust, and two adults jointly. These are
issued for five and ten year maturity and can be pledged to banks as collateral for availing loans. To encourage the taxpayer to invest in this scheme, the govt has allowed this
Investment in (NSC) to be claimed as a tax deduction under Section 80C which helps the tax payer in reducing his tax burden

NSC VIII Issue

Scheme specially designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses.
No maximum limit for investment.
No Tax deduction at source.
Certificates can be kept as collateral security to get loan from banks.
Investment up to INR 1,00,000/- per annum qualifies for IT Rebate under section 80C of Income Tax Act.
Trust and HUF cannot invest.
Rate of interest 8.50%.
Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 151.62 after 5 years.
NSC IX Issue

No maximum limit for investment.


INR. 100/- grows to INR 234.35 after 10 years.
Minimum INR. 100/- No maximum limit available in denominations of INR. 100/-, 500/-, 1000/-, 5000/- & INR. 10,000/-.
A single holder type certificate can be purchased by an adult for himself or on behalf of a minor or to a minor.
Rate of interest 8.80%.
Maturity value of a certificate of INR.100/- purchased on or after 1.4.2012 shall be INR. 236.60 after 10 years

There are 2 issues of National Savings Certificate (NSC) currently in operation and the Interest Rate on these National Savings
Certificate is as follows:- Particulars NSC (VIII Issue) NSC (IX Issue) Maturity Period* 5 year 10 year NSC Interest Rate (wef 1st April
2013) 8.5% 8.8% *Earlier the smaller duration issues were of 6 years but from 1^st December 2011, this has been reduced to 5
years. Interest on National Savings Certificate (NSC) is liable to tax as per the Income Tax Slabs of the Individual. However, no TDS is
deducted on such interest but such interest shall be reflected in the Income Tax Return of the Individual. * Recommended Read:
Income Tax Slab Rate Although this Interest on National Savings Certificate is taxable, this Interest is not paid to the account holder
but is reinvested in NSC. As this Interest is re-invested in National Savings Certificate which is a specified instrument u/s 80C, a
taxpayer can claim this amount of interest as a tax deduction under Section 80C. So, the taxpayer will first have to show this interest
earned as an income and then claim this as a deduction under Section 80C. The total maximum deduction that can be claimed u/s
80C is Rs. 1,50,000 only. National-Savings-Certificate Minimum and Maximum Amount to be Invested in NSC The Minimum Amount
to be invested in National Savings Certificate is Rs. 100 and there is no maximum limit on the amount to be invested in the NSC. A
person can invest any amount in National Savings Certificate. However, tax deduction u/s 80C can only be claimed for a maximum of
Rs. 1,50,000. The National Savings Certificate is issued in denominations of Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, Rs. 10,000. A person
can purchase any no. of certificates of any denomination. NRIs are not eligible to purchase National Savings Certificate (NSC).
However, if a person was a Resident Indian at the time of purchasing the NSC and become a NRI during the maturity period, he shall
be allowed to claim benefits of this scheme. HUFs and Trusts are also not eligible to invest in this savings scheme. Type of NSC
Certificates There are 3 types of National Savings Certificate, namely 1. Single holder Type Certificate: This type of NSC is issued to
the holder himself or on behalf of the minor. 2. Joint A type Certificate: This type of NSC is issued jointly to 2 adults payable to both
the holders jointly. 3. Joint B type Certificate: This type of NSC is issued jointly to 2 adults payable to either of the holders. These
National Saving Certificates (NSC) are only redeemable on maturity of the specified term. At the time of maturity, the holder of the
certificate shall submit the certificate to the Post Office. On receipt of the maturity amount, the holder shall sign on the back of the
certificate that he has received the payment and surrender the certificate to the Post Master. Payment for Purchase of NSC The
buyer shall submit a request for purchasing the NSC in Form A. * Download: Form A for purchasing NSC The Payment for the
purchase of NSC may be made to the Post Office in any of the following modes namely:- * Cash * Cheque, Pay order or Demand
Draft drawn in favour of the Postmaster * By submitting a request for with drawl of funds from the Post Office Savings Bank
Account * By surrendering an old matured certificate stating on the back side of the certificate surrendered Received payment
through issue of fresh certificate, /vide/ application attached The Postmaster shall issue the new NSC Certificate on the spot (if
possible) or shall otherwise issue a provisional receipt to the purchaser which can later be exchanged with the National Savings
Certificate (NSC) at the time of issue. A National Savings Certificate can be transferred from one Post Office to another on making an

application in the prescribed form at either of the two post offices. Nomination Facility The purchaser of the /National Savings
Certificate (NSC)/ may nominate any person as a nominee at the time of purchasing the National Savings Certificate in Form 1 or
before the maturity of the NSC in Form 2. The person so nominated shall be entitled to claim the maturity proceeds in case of death
of the Original Holder. In the event of death of the holder of certificate, the nominee(s) shall be entitled at any time before or after
the maturity of the certificate to:- * Encash the Certificate * Sub-divide the NSC Certificate in appropriate denominations in favour of
individual nominees. However, the rights of the nominee would only come in force in the event of death of the original holder of the
National Savings Certificate (NSC). The nominees would also be required to make an application to the Postmaster intimating him
about the death of the original holder. This application should also be accompanied with the Death Certificate . Issue of Duplicate
NSC Certificate in case of Loss 1. If the Certificate is lost, stolen, destroyed, mutilated or defaced, the rightful owner of such
certificate may apply for the issue of a duplicate certificate in the specified form to the post office where the certificate is registered
or to any other post office which shall forward the request to the post office from where the certificate has been issued. 2. Every
such application for issue of duplicate certificate shall be accompanied by a statement showing the particulars, such as number,
amount and the date of certificate and the circumstance attending such loss, theft, destruction, mutilation or defacement. 3. If the
officer-in-charge of the post office of registration is satisfied of the loss, theft, destruction, mutilation or defacement of the
certificate, he shall issue a duplicate certificate on the applicant furnishing an indemnity bond in the prescribed form with one or
more approved sureties or with a bank guarantee . 4. A duplicate certificate shall be treated as equivalent to the original certificate
for all the purposes of these rules except that it shall not be encashable at a post office other than the post office at which such
certificate is registered without previous verification. 5. A Fee of Rs. 5 would be charged for the issue of Duplicate Certificate. Post
Maturity Interest on National Savings Certificate In case a National Savings Certificate has matured but it has not been redeemed,
interest shall be given on such certificates for a maximum of 2 years from the date of maturity. Simple Interest would be given in
such cases and the interest rate would not be the National Savings Certificate Interest Rate but Interest Rate would be the rate at
which interest is given to Savings Account Premature encashment of National Savings Certificate NSC cannot be redeemed before
the maturity of the National Savings Certificate except under following circumstances:- 1. On the Death of the Holder or the Holders
in case of Joint Holders 2. On forfeiture by a pledgee being a Gazetted Government Officer when the pledge is in conformity with
these rules. 3. When ordered by a court of law If the National Savings Certificate is encashed within 1 year from the date of issue,
the encashment shall be done at the face value without any interest. However, if the encashment is done after 1 year interest shall
be payable in such cases but the encashment shall be done at a discount