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  • Types of NSC Certificates
  • Type of NSC Holders
  • Benefits on Investment
  • Advantages of National Savings Certificates
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What is National Savings Certificate?

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. The holder gets the tax benefit under Section 80C of Income Tax Act, 1961

Types of NSC Certificates

There are two types of NSC, namely NSC issue VIII and NSC issue IX. We’ll examine them in brief:

This is a better investment avenue for those who want to enjoy secured investments and expect tax benefits. Any individual can obtain these certificates except HUFs. The denomination range for this certificate is Rs. 100 to Rs. 10,000.  The maturity period of this certificate consists of five years.

The denomination is ranged from Rs. 100 to Rs. 10,000 but the interest, while comparing with issue VIII is considered to be slightly higher. The maturity period of this certificate consists of ten years.

Benefits on Investment

This scheme allows complete free taxation on interest except for earned interest in the last year. No upper limit has been mentioned for the investment. Duplicate certificates will be arranged in case of losing the original. Section 80C of the Income Tax Act allows investment tax benefits to the investment holders. If the interest is earned, the amount reinvested in the scheme will enhance the invested amount.

Type of NSC Holders

This Joint ‘A’ certificate is applicable to two adult holders and will be paid to both when the scheme is matured.  For transfer or cancellation or even for  nomination, the signature of both the holders would be needed.

The Joint ‘B’ certificate is the same as Joint ‘A’, but differs in the payment of maturity value. Hence, the maturity value will be given to any one of the two account holders.

This Single Holder Certificate applies to an adult, or an adult on behalf of a minor. It enables the individual to hold the account to himself.

Documents Required

 The applicant should submit the proof identity and the proof of address while applying for the National Savings Certificate.

Conditions

The scheme could only be availed if the maturity period of the investment is five years or more. The nominee can claim to withdraw the investment amount before the maturity period if the NSC holder has died or if the court order prescribes to avail it prematurely.

100% safe because it’s a govt instrument
Fixed rate of return
Tax deduction on principal and interest under 80 C
Easily accessible
Easily transferrable
Use NSC as collateral for loans
No TDS on maturity
Nominee facility
Premature withdrawals

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