National Saving Certificate is an investment option by which an individual can invest his income to get a fixed interest. You can reinvest the interested earned and get benefit of 80C deduction under income tax. We will talk about here the complete detail about National Saving Certificate (NSC) VIII Issue like who can apply, where to apply NSC, how to apply NSC, nomination, denomination, interest rate etc. You can ask your queries about National Saving Certificate (NSC) via comment form.
Who can Apply NSC?
- Any adult individual can purchase NSC VIII Issue, in his own name (single holder type) or jointly with another adult individual with the condition ‘jointly or survivor’ (A type) or ‘either or
survivor’ (B type).
- Besides, parents and guardians on behalf of a minor can also purchase these (single holder type) certificates. Issue of these certificates to banks, companies, corporations and other institution
has been discontinued w.e.f. 1.4.1995.
- W.e.f. 13.5.2005, an HUF cannot purchase NSCs.’Prior to 2.8.2001, the karta of a HUF was allowed to purchase NSCs in his name jointly with any adult co-parcener, without adding the word ‘HUF’. In such cases, the tax benefit would be allowed to the HUF. In the opinion of Board of Editors, this position should prevail w.e.f. 13.5.2005 also.
- Non-resident Indians cannot invest in NSCs (VIII Issue). 1 W.e.f. 3.10.2017, if a resident holder subsequently becomes non-resident, the certificate shall be deemed to be encashed on that date and it shall earn interest at P.O. Savings A/c rate till it is actually encashed. 2
Where to apply for NSC?
- Any post-office who are registered or approved by Government agency are authoritative to release NSC certificates, so anyone can purchase an redeemed NSC at any time when he is willing to have NSC certificate.
- All public sector banks and ICICI Bank, Axis Bank and HDFC Bank authorised in this behalf. 3
How to apply NSC?
- The application in the prescribed form alongwith the payment has to be deposited with the Post-Office/Bank directly through its authorised agent.
- The payment is to be made in cash or by cheque/pay order/demand draft or by presenting a withdrawal for, alongwith the pass book of a Post-Office Savings Bank Account or by Surrender of a matured old certificate (including National Development Bonds, Kisan Vikas Patra, etc.).
- Payment can also be made by electronic mode if certificates are purchased from post offices working on CBS platform.
- An applicant should. furnish his Aadhaar Number or proof of enrolment for Aadhaar, at the time of application.
- Existing NSC holders are also required to furnish their Aadhaar Number latest by 31.3.2019.
Subscription of NSC
W.e.f 1-7-2016, NSCs VIII issue may be issued for any amount above Rs.100 and in multiples of Rs.100. One transaction of an investor on a day shall result in one certificate in e-mode or one entry in passbook. Earlier, NSCs were issued in the denomination of Rs.100, Rs.500, Rs.1000, Rs.5000 and Rs.10,000.
NSC Interest Rate
Currently, the rate of interest is 7.6% per annum. On certificates issued upto 31-3-2016 interest shall be compound half-yearly. The amount of interest accruing on a certificate of Rs. 100 shall be as follows:
|Financial Year||Interest Rate|
|On NSC certificates issued during 1-7-2017 to 31-12-2017 4||7.6%|
|On NSC certificates issued during 1-7-2017 to 31-12-2017||7.8%|
|On NSC certificates issued during 1-4-2017 to 30-6-2017||7.9%|
|On NSC certificates issued during 1-10-2016 to 31-3-2017||8.0%|
|On NSC certificates issued during 1-4-2016 to 30-09-2016||8.1%|
|On NSC certificates issued during F.Ys. 2013-14 to 2015-16||8.5%|
|On NSC certificates issued during F.Y.2012-13||8.6%|
|On NSC certificates during 1.12.2011 to 31.3.2012||8.4%|
|On NSC certificates issued upto 30.11.2011||8%|
On certificates issued w.e.f 1.4.2016, interest shall be compounded yearly. On certificates issued upto 31.3.2016 interest shall be compounded half-yearly.
- The facility of nomination is available on all certificates (including the joint-holders type), except for the certificates purchased by or on behalf of a minor.
- In case of no nomination, payment upto Rs. 1,00,000 can be made to the legal heirs of the deceased holder even in the absence of Probate or Letter of Administration or Succession Certificate.
Note: It may be noted that the Supreme Court has held that if a person holding a NSC or an insurance policy dies, his legal heirs would have the sole right over the money on maturity rather than the nominee mentioned in. the certificate. The nomination only indicated the person who was authorised to receive the money. Amount paid to the nominee becomes the estate of the deceased and devolves upon all persons who are entitled to succession under law, customs or will of deceased.
NSC e-Mode Certificate
- W.e.f. 1-7-2016, physical pre-printed certificates shall be discontined and NSCs shall be issued either on exclusive electronic-mode or passbook mode.
- Issue of NSC shall be conveyed to the investor electronically (by email/on mobile).
- NSC in e-mode can be accessed online only by the investor through electronically secure means.
- Under passbook mode, NSC shall be issued in prescribed format printed on passbook under signature of authorised official.
The maturity period for NSC was 6 years but due to revision recently the period is now 5 years for NSC VIII issue. For general understanding, if the value of certificate is Rs. 100 then on its maturity the compounded amount which one gets is Rs. 160.10. The maturity amount can even be re-invested. Maturity value of any other value is charged under proportionate rate.
The amount payable on maturity for a certificate of Rs.100 denomination (proportionately for other certificates) shall be –
|For certificated issued up to||Amount|
|1-12-2011 to 31-3-2012||150.90|
|1-4-2013 to 31-3-2016||151.62|
|1-4-2016 to 30-09-2016||147.61|
|1-10-2016 to 31-03-2017||146.93|
Loan on NSC
Amount of loan is depends on the bank from which you are going to apply. Once you have a NSC certificate you can come within reach of any nearest scheduled bank or any cooperative bank for loan. It is better to approach for any known bank from where you have a close relation because each and every bank has its own banking rules. To obtain loan or overdraft through this certificate is simple and flexible and it is neither expensive nor a complicated process compared to any other unsecured loan has like credit loans or credit cards used to have.
NSCs Income Tax Benefits
Amount invested in NSC-VIII issue alongwith PPF/LIC/ULIP etc. up to a maximum of Rs. 1,50,000 is eligible for deduction u/s 80C. Interest accrued during the year (except for the last year) shall be deemed to be reinvested and shall also qualify for deduction u/s 80C.
So being a government oriented instrument you have the security that the money will not die and would be used for good purpose with the fact that you get good return. So choose your NSC certificate with ingenuity and practically.
- GSR 1238(E), dt. 03-10-2017
- GSR 1238(E), dt. 03-10-2017
- Notification NO.7/10/2014-NS dt. 10-10-2017
- Vide Notification F.No.1/4/2016-NS Dt. Jan 2018