NSCs (National Savings Certificate)

National Savings Certificates (NSCs) are popular as Tax Saving instruments. NSC scheme has been designed for Government employees, Businessmen and other salaried classes who are Income Tax assesses. NSCs are a long term tax saving option for investors. Loan is available form banks against pledge of NSCs in their favour. The amount invested in qualifies for tax benefits under Section 80 C of Income Tax Act. The accrued interest also qualifies for benefits of Section 80C. However, the interest accrued on NSCs is taxable.

Changes in the scheme:

The maturity period of NSCs (VIII Issue) reduced from 6 years to 5 years.
Introduced NSC (IX issue) with maturity period of 10 years and higher interest rate of 8.70% per annum w.e.f. 01.12.2011.

Feature

Description

Eligibility

Any individual singly or jointly with other adult. applications for purchase of NSCs may be submitted on NC-71.A guardian on behalf of a minor.

Minimum amount

Rs. 100/-

Maximum amount

No maximum limit

Maturity period
(VIII issue)

Six years for NSCs purchased upto 30th November 2011.
Five years for NSCs purchased on or after 1st December 2011.

Maturity period
(IX issue)

Ten years

Interest Rate

Period	VIII Issue	IX Issue
Upto 30.11.2011	8.00%	NA
01.12.2011 to 31.03.1012	8.40%	8.70%
01.04.2012 to 31.03.2013	8.60	8.90%
01.04.2013 onwards	8.50	8.80%

Nomination facility

AvailableApplication for Cancellation or Variation of Nomination previously made be submitted on form NC-53.

Transferability

Transferable from one Post Office to another. Application for transfer of NSCs from one post office to another be submitted on NC-32.The certificate can also be transferred from one person to another with the previous consent of the Postmaster or the Head Postmaster by submitting application NC-34.. The transfer can be made after expiry of a period of at least one year from the date of the certificate.On an application being made in the prescribed Form by the transferor and transferee, the Postmaster may permit the transfer of any certificate (pledging of certificate) as a security.The transfer is permitted only for the whole amount and not for the part of it.Transfer of the Certificate purchased on behalf of minor is permitted only if his guardian certifies that the minor is alive and the transfer is for the benefit of the minor.

Encashment

A Certificate issued upto 30th November 2011 can be encashed after Six years and the certificates issued on or after 1st December 2011 can be encased after expiry of Five years.The Certificate can be encashed at the Post Office at which it stands registered or it at any other Post Office subject to satisfactory verification of the identity of the presenter.In case of certificates purchased on behalf of a minor who has since attained majority, the certificate shall be signed by such a person himself, but his signature shall be attested either by the person who purchased the certificate on his behalf or by any person who is known to the Postmaster.In case of death of the holder, in respect of which a nomination is in force, the nominee or nominees are entitled to encash the Certificate at any time before or after the maturity.