National Saving Certificates (NSC) – A Complete guide

National Saving Certificates – A Complete guideNational Saving Certificates – A Complete guide

National Saving certificate is issued by Post Offices in India and is a very good small saving scheme. Do you know that investment in NSC can be created in such a way that it provides regular fixed income and can be used as one of the retirement planning options?

In this article we would discuss complete details about National Saving Certificate, how this is used for reducing tax, how the interest income is taxed and how to use this to create regular monthly income.

Features of National Saving Certificate (NSC)

National Saving Certificate is issued by Post offices and is backed up by the Govt. of India.

  • NSC’s are available for 5 and 10 years period
  • NSC’s are available for a minimum investment of Rs 500 and in multiples of Rs 500 / Rs 1,000 / Rs 5,000 / Rs 10,000
  • There is no maximum limit
  • Interest rates are 8.5% p.a. for 5 year NSC (VIII) and 8.8% p.a. for 10 years NSC (IX)
  • Rs 100 invested in 5 year NSC would fetch Rs 151.62 and in 10 year would fetch Rs 234.35
  • Interest is compounded every half year
  • Nomination facility available
  • Individuals, Joint individuals and minor supported by guardian can invest NSC.
  • Societies / Companies cannot invest in NSC. However NRI's can invest in NSC.
  • NSC's can be purchased at post offices by filling up the application form along with ID proof.
  • NSC's are not available online

How NSC’s are useful?

National Saving certificates are purchased mainly for tax saving purpose. Investment up to Rs 1 lakhs can be claimed under 80C for income tax purpose.

NSC’s provide assured returns. Currently the interest rates are 8.5% p.a. for 5 years NSC and 8.8% p.a. for 10 year NSC

Also read: Is Post office term deposit is better than Bank FD?

Liquidity and premature withdrawal

From liquidity point of view, these can be pledged with banks for loan purpose. Premature withdrawal is not permitted.


Investment in NSC up to Rs 1 lakh is exempted from income tax under section 80C.

The interest income on NSC is assumed to be re-invested. From taxability point of view, this needs to be added under “Other income” and the same can be claimed as exemption under section 80C. In case, any individual has already exhausted Rs 1 lakh exemption under 80C, it becomes taxable income.

Any interest amount not taxed (accrual basis) every year becomes taxable at maturity. Means the interest income at maturity is NOT tax free.


There is no TDS deducted by post office on interest income. It should be declared by individual as taxable income either every year or during maturity.

If NSC’s are not withdrawn, it would be eligible for interest at prevailing post office savings scheme (which is currently 4% p.a.) for a maximum period of 2 years.

You can transfer NSC from one post office to another post office before maturity by submitting an application form.

Also read: All about Small saving schemes / Post office saving schemes

How to buy NSC Online?

There are questions asked by our readers earlier on various comments, saying can we buy NSC Online? Currently Post office is not offering NSC Online. But if this enabled by Post office, it would be really good that one can straight away buy NSC online as this is safe investment.

Creating regular income from NSC’s for retirement

No wonder this investment option can be used for even retirement planning or to get regular fixed amounts.

Invest in NSC (NSC-IX-10 years) every year for 10 years.  After 10 years, you would get regular assured amounts for subsequent 10 years. Since the capital and returns are protected and backed up by Govt. of India, this can be used as a best retirement planning option.

Year of investment Amt invested (Rs) Maturity date Maturity (Rs)
2013 1,00,000 2023 2,34,350
2014 1,00,000 2024 2,34,350
2015 1,00,000 2025 2,34,350
2016 1,00,000 2026 2,34,350
2017 1,00,000 2027 2,34,350
2018 1,00,000 2028 2,34,350
2019 1,00,000 2029 2,34,350
2020 1,00,000 2030 2,34,350
2021 1,00,000 2031 2,34,350
2022 1,00,000 2032 2,34,350

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National Saving Certificates

Article by Suresh

Suresh KP i.e. me have written 500+ articles on this blog. I love doing analysis and identifying the Best investment options.


  1. sanjeev Rastogi says:

    Withdrawal of nsc is very difficult in post office. My permanent address is in hardoi up and now I am living in other city and I want to recive my nsc withdrawal payment in my bank account automatically or on my request but post office team is not giving chegue or transfer in bank without my present.
    How can it is passable.

  2. Manpreet kaur says:

    I lost my NSC certificates ,I have FIR lodges in concern police station. I request that lady with whom I did that NSC to get their number but she is not refusing but continously making excuses. How can I get their numbers I have date when taken them .Please help me.

  3. Majid says:


    I have booked NSC 5 yrs before and it is going to get matured in 2 months.

    meanwhile I have changed my address and I don't have any address proof belonging to my old address.

    What should I do ?

    — Should I simply ask them to update the new address as I have my aadhar/pp with my new address ?

    — Do they need address proof of my old addres ?

    Please advise




  4. Varinder says:


    If i can purchase NSC by providing account number of my nominee ( may be parents) as tax will be saved from my salary and ammount will be added in nominees's account ?


  5. jitendra says:

    Its bery difficult to redeem NSC purchased from post office in different my case , i have bought NSC worth 40K in 2008 from secunderabad and when they mature this year in feb, i sent it to bank to redeemp it.but Secunderabad post office rejected saying, this can be done only in case of loan (tool almost 2 month to get this reply), then again i sent my NSC through BHOPAL HPO new market , and same after more then 2 month got a written reply that they are now CBS branch so i have to personally visit secunderabad to get the money..its really tiring. but i have not choice left..i m planning to go secunderabad for one day…hopefuly in that one day..i will get money..

  6. Rajesh sharma says:

    Sir, my father had purchased NSC from Chandigarh PO, for 6 years duration, it got matured on July this year, but he expired on june. I am nominee for that nsc. But I live in Shimla, can I encash it at Shimla with my id proofs. Thanks

  7. kiran says:

    Hi suresh. When I pay by cheque for purchading nsc do i have to sign back of chq also? I want to invest but am out of country. Would really appreciate your response

  8. K RAGHAVENDRA says:

    Dear sir,

    Iam a Govt. employee, my salary is Rs 320000/- p.a, my savings under 80C is Rs 1 lakh, i get Rs 50000/- p.a as interest from Rs 5 lakh fixed deposit in bank, ' does iam eligible for submitting Form 15G to bank, as my taxable limit crosses Rs 2 lakhs'

    Kindly reply me, sir

    Thank u

  9. anitashan says:

    I purchased NSC bond for 10000 in 2007 and completely forgot about it. It got matured last July and saw few weeks back. Will I still be able to get the amount from the post office ? Do have any idea on what all would they need apart from my id proof and the original certificate?




    • Suresh KP says:

      Anitashan, You can encash now. Just carry NSC certificate, thats all

      • nitin says:

        Hi sir,
        i purchased nsc in 2004 june in im in dehradun.
        Im unable to locate my nsc papers.
        also nsc has matured,
        how can i withdraw my nsc.
        Kindly help.
        can i call any no.
        nitin bhatia 9719234558

  10. Pradhan says:

    Dear Sir

    Recently the PWD department returned the National Savings Certificate deposited as a 'fixed security deposit' by my great grandfather in the year 1970.
    According to the information available on the certificate it says it is a 7-Year National Savings Certificate Fourth Issue. 

    The Saving bond is of Rupess thirteen hundred.

    Sir, I am completely absurd about the the terms and conditions included,:  
    Is the certificate renewable to the present Scheme of 9th Issue?
    If so, then what will be valuation of the certificate after Forty Four years?
    Notwithstanidn it crossed 5,6,7 and 8 Issues. 

    Sir, we don't have papers of the terms and conditions, if there was, when my grandfather deposited the bond. 
    The post master is not able to reply my queries if the valuation of the certificate exists.


  11. nirmala says:

    when i purched my nsc in aug. 2014 that will be count wicth financial year!

  12. Hitesh says:

    Dear Sureshji,

    I had carried the NSC document for encashing to my hometown & returned to my workplace. Latter I understood that the NSC certificate has gone missing since I was not able to give it to my brother. It has already matured a year back. How can I ask for a claim?



  13. shree says:

    Hi Suresh,

    I have purchased NSC at NH postoffice at chennai.My certificates are matured and i am not able to go in person to encash it and i authorised my mother to collect it.But postmaster refused to pay stating that my signature difference is there.What should be done now.I cannot go in person for atleast five years.

  14. Srinivas Rao says:

    I have NSC for Rs. 100000.00 ( One lakh only) . Can i withdraw after two year form the dtae of commencement i.e. 12.01.2012

  15. makarand mhatre says:

    i have purchased NSC from vasai(thane).Now after maturity can i encash it in mumbai post officces ????

  16. K RAGHAVENDRA says:

    Dear Sir,

    I would like to purchase NSC VIII certificates of Rs 10000/- , total worth of Rs 500000/-,  '' is the interest obtained on nsc bonds taxable or not ''.  For bank, as per bank terms and conditions, if a customer exceeds interest on fixed deposits of Rs 10000/- per anum in his CIF (Customer Information Facility), he is liable to tax,

    In case of nsc, how would be the tax deduction, kindly reply me

    Thank u sir


    • Suresh KP says:

      Interest on NSC is taxable and you need to indicate the same in your ITR and pay income tax. However you can show such interest in 80C and get exemption in case you have not exhausted 80C limit.

  17. Rashmi says:


    I purchased NSC 5 yrs from post officefor the amount of Rs 10000  during nov 2013 and i had declared it for tax purposes in dec 2013 

    1: will this be declared for the 13-14 tax year.

    2: can i declare the same for the 2014-15 as well since its a 5 year NSC.



    • Suresh KP says:

      Hi Rashmi, I hope the question is about 80C deduction. You would get exemption in the financial year when you invested. This transaction is done in Nov-13, hence 2013-14, you would get exemption. You cannot get same exemption in 2014-15.

  18. Walter says:

    Dear Suresh,

    I had purchased an NSC 6 years back in Hyderabad, AP. I am currently staying in Mangalore, Karantaka. I have applied for transfer of NSC from Hyderabad to Managlore, but there is no response from Hyderabad PO even after repeated requests from the head post office in Mangalore, for the past 6 months . My NSC has matured and I cannot travel to Hyderabad to collect it. I still have the original certificate with me but I am afraid that someone has misappropriated my money in Hyderabad, hence the delay. Kindly advise.

    • Suresh KP says:

      Hi Walter, Please file complaint in Post office URL Please select NSC and give all relevant details. This should be addressed within 1 week

  19. Dear suresh

    hope u are well and fine, im sudhansu kr singh an officer in BSF a paramilitary force,i have been purchasing NSC of rs 20,000 on monthly basis since august 2013,i have following no of  querys for your kind consideration and for your reply.

    1.only one month NSC will be count for the IT rebate for the financial period or all monthly purchased NSC will count for the purpose. my transferable nature of job i  shifts from one place to another one within 3 years, and if  i want to continue my nsc at new place on monthly basis,it feels me a messy kind of, and some nsc from agartala, some from jaipur some from kashmir,  would really creates a problem at the time of maturity.what should be an ideal advises from u over regulating these NSC in simple way please illuminate me.

    3.on posting i need to apply for transfer of my nsc at the post office where i have invested my NSC or i should apply at my new posting place post office. im investing NSC on monthly basis,at the time of maturity, i need to go again and again for its encashment or any provision of crediting amount in indvidual A/C.

    5.any other relevant information seeing my nature of job.

    thanx and regard!


    • Suresh KP says:

      Sudhanshu, You have good intention, however buying NSC each month by going to post office is painful problem. 1) Any NSC purchased during financial period 1-Apr to 31-Mar would be counted for IT rebate u/s 80C up to Rs 1 Lakh (maximum) 2) You can buy new NSC whereever you go, but it would be pain to maintain so many NSC’s. 3) Wherever you can buy NSC’s 4) You need to surrender the NSC certificate in order to encash during maturity. 5) I have following suggestion. Instead of investing in NSC, try opening PPF account with SBI or any other bank. Start investing every month for a minimum of Rs 500. Maximum in a year could be Rs 1 Lakh only. But you can deposit this amount from any where in India. It would carry 8.75% interest which is higher than NSC. You would get tax rebate too up to Rs 1 Lakh in a financial year. You can make upto 12 deposits in a year. All your objectives would be met. What do you say ?

      • sudhansu kr singh says:

        Dear Suresh,

        Firstly thx for your kind response and valuable speaking my mind i want to invest rs 20,000 on monthly basis,as i was doing since june 2013 to till month.pls tel me

        1,can i invest 20,000 rs monthly basis in PPF with lock in period of 5 years and tax rebate

        2,any other seeing my 20,000 rs investment  on monthly basis with all benefits.

        so please tel me if PPF is suitable for me or not,your valuable suggestion will be highly appreciated.

        thx and regard

        • Suresh KP says:

          Hi Sudhakar, PPF has a lock in period of 15 years. If you are looking for 5 years option, you can look for ELSS mutual funds (lock-in 3 years) or NSC (lock in 5 years). Unless you complete 5 years you cannot get any returns from such schemes including PPF. If you are looking for regular returns, you can look to invest such money in Post office MIS schemes after 5 years when you withdraw from NSC/ELSS funds

  20. nkishorek says:


    We have purchased NSC bonds in Bangalore. Now I am working in UK. Bonds are already matured 6 months back. Please guide me how to encash and get the amount into my account.  I have sent my cousin to Bangalore post office, but unable to solve the issue.

    • Suresh KP says:

      Kishore, As per my knowledge, you cannot encash your NSC by giving a letter through your friend. You would get normal bank interest of 4% up to 2 years from the date of maturity.

    • Sarthak says:

      As per my experience, your brother can get it encashed. You have to send him original certificates by post with an authorisation letter on plane a4 sheet stating that “my brother can receive my NSC cheques on my behalf.” with his signature and your signature. On top of that you need to send him a copy of your id proof like passport or indian driving license self attested by you. Then you brother can proceed to the post office with all the above documents and his id proof as well. Now he can easily get the cheques on your behalf favouring the name written on bonds.

  21. rajesrRaju says:

    Can i buy NSC on back date ?

  22. Balakrishna says:

    Dear Team,

    I wanted to take NSC as Rs. 3000 PM plan. Is that possible. please reply

    • Suresh KP says:

      Hi Balakrishna, You need to buy them every month by visting post office. There is no SIP  / recurring deposit kind of scheme in NSC. If NSC is available online, then this is very much possible

  23. Mitra says:

    I purchased an NSC in 2007 Feb, however I withdrew is just yesterday. The Post office gave me 16170 for the invested amount of 10000. He was however giving me 16010, on enquiring he gave me 160 more. I now figured they are suppose to give me the interest for one year. What is total amount that I should get and how do I go about getting the right amount. He gave me cash and don't have the xerox of the certificate.
    Please assist.

    • Suresh KP says:

      Mitra, The amount of maturity would be indicated on NSC. Since it should have matched in Feb, for Mar and Apr you are supposed to get extra money. Ideally you should ask for receipt of the maturity amount. You can still approach them now and ask for the computation.

  24. Poonam says:


    I had lost few documents but am not sure if my NSC certificates that matured in 2011 were along wiht those documents. I used to maintain xerox copies and have copies of those certificates. How do I know if I have claimed those? 

  25. Sachin says:

    Respected Sir,

          I lost my NSC certificate and dont have information which was took from ahmedabad in 2012 and dont know about post office. So please suggest me.  

    • Suresh KP says:

      Sachin, You should have NSC number or atleast a month and post office details where you have invested. With this you can approach any post office nearer to you and enquire.

      • Sachin says:


        I have full details of month and year with name of post office from where I had purchased the questioned NSC.

        I extend my heartily thanks for the valuable suggestion put forward to me.

  26. RAMAN KUNWAR says:

    Respected Sir.

    My father had purchased 6 years NSC and it was already matured on 2012 but he was expired on 2009. My mum is nominee for this purpose. When i talked to the officers of post office they told me to submit the copy of id proof and residential proof. The fact is that our origin is Nepal so my mum does not have any id proof relating to India. That's why my question is how can it be withdrawn by nominee having citizenship other than India ? I will appreciate sir if u advice me. 


    Raman Kunwar


    • Suresh KP says:

      Hi Raman, You have asked a difficult question. But I felt this would be minimum requirement where Post office would ask. I am not sure of that, but you should try to get an ID proof through Aadhar card or PAN card. You can check legal guidelines and get it.

  27. Subbarao says:

    Hi, I lost my NSC certificate and dont have any information which was taken in 2004 in chennai and i remember post office where i took these bonds, so is it possible to get duplicate copies if i go there now , right now i am in hyderabad,  Pls suggest me 

  28. Nep says:

    Dear Sir, my uncle nominated me in his NSC,  He expired two years back.  The NSC has expired

    I aim to claim the amount.  Only snag is he purchased them in Mumbai and I am in Bangalore

    can I write to the Post Master to transfer the amount to a Post Office in Bangalore so that I can

    make the encashment in Bangalore.



    • Suresh KP says:

      Hi Nep, I understand from few readers who posted on this blog that you can withdraw NSC from any post office. I have not personally went and enquired about this new feature. Pls approach your nearest post office. Do write me in case you were able to close the transaction from your near by post office.

      • Manish Ashar says:

        Dear Suresh,

        I purchased NSC from HPO Ahmedabad on 20th Feb. I enquired about encashment option. The answer was NSC has to come to issuing office only. Either investor has to approach personally to issuing office, or it can be sent via any of the post office (it will take approx 2 months time).

        Now I require more clarity on Interest point (for which I was reading your blog).

        1. Principal invest this year. Next year I will accrue interest. This should be shown as Other income. and the same should be shown as Investment? or something else. If yes, how I will show investment proof of such case to my employer next year.


        • Suresh KP says:

          Manish, I am getting different opinions from readers. While I know that encashment of NSC can be done only from PO where you invested, some readers indicated that any post office are accepting encashment irrespective in which post office they are invested. Now you have indicated what I was telling on this blog. Looks post office at their descretion are making these calls. Regd your other point, you should calculate interest income in NSC and show as “Other income” in your income tax returns. e.g. if you invested Rs 10,000 in NSC @ 8.5%, you are getting accrued income of Rs 850. This would come every year for 5 years as other income. However if you still do not exhausted 80C, this income can be shown u/s 80C and claim exemtpion too.

  29. Name says:


    i read in most of the articles that it is advisable to declare as accural interest while taking NSC. Could you please tell me which form should be filled for showing the interest as re investment in 80c section? Also, please do let me know will the post office provide any document as proof for the interest that is re invested in that year?

    • Suresh says:

      Hi, In section 80C, there is seperate line item as NSC interest. You can claim under this. Post office would not give any seperate document. You need to declare on your own

  30. Rohish Kumar says:

    Dear sir, I am Mr. Rohish Kumar I purchaed NSC in Karnataka state, Now its validity is over. Now I am working in other state (Goa) shall I encash that NSC in prasent state post office? please give me the solution.

    • Suresh says:

      Rohish, As per my knowledge you need to go to home place of post office where you have purchased NSC. However recently a reader indicated that post office has indicated that they can encash at any place. Pls check with your nearest post office. Pls do post in case this is true so that it would be beneficial to others too

    • Jagan says:

      You can encash in any post office in India

  31. Padmaja Reddy says:

    Hello Suresh,

    Hope you are doing well. I have a query on NSC certificate – I got the Certificates few years back and the maturity of the certificate is this year, unfortunately i lost the original certificate in luggage misplacement in airport. Thankfully i have the scanned copies of the certificates, so for withdrawal of the money what would be the procedure. 


    • Suresh says:

      Padmaja, I know that in case of lost certificates, if you have certificate nos, you can approach and get duplicate copy of NSC. I feel similar procedure should be there to withdraw during maturity. Please contact the post office.

  32. Mangesh Nadkarni says:

    Hi Suresh,

    Thanks for the information. I just wanted to check  that after maturity if the proceeds are reinvested in NSC, is the accrued interest still taxable? Also, if i take the NSC in my child's name, who's a minor, is the interest taxable in my hands after maturity?



    • Suresh says:

      Hi Mangesh, You can claim the re-invested amount as exemption u/s 80C every year if your 80C is not exhausted. Else it is taxable every year and you should show as other income in your tax returns and pay income tax. If you are taking in your child name and he would fall under definittion of “relative” and his income would be added to your income and you are liable to pay income tax on his behalf.

  33. Sidhesh says:

    Hi Suresh,

    You have mentioned that NSC is available for a period of 5 yrs and 10 yrs.

    I purchased a NSC in Jan '10 which is having 6 yrs period.

    Has there been a change in the maturity period?

  34. priyanka says:

    hi suresh,

    I am a software engineer from hyderabad and I earn 40,000 per month.I am planning to buy 5 gms of gold every month for 5 to 6 years as I want to create wealth and I consider this as a part of my long-term financial planning.I want to know the estimated price of gold in the year 2025 and 2030. I even want to know is this a good practice..I heard that gold prices differ from place to place ex:chennai, this true? then where to buy gold? please suggest me what are the best options for buying gold.Thanks.

    • Suresh says:

      Priyanka, I don’t think RBI Governor also would be able to indicate what would be gold price in 2025-2030 :-) You asked tricky question. However don’t worry, you should keep investing regularly so that it would be useful for long term planning. My suggestion is to you should invest in Gold ETF’s (which are available in stock market like any other stock). These would track international gold prices. You can keep accumulating every month. You can redeem/sell any time. 

  35. sushmagirish says:

    We took NSC bonds in chennai,but recently we shifted to abroad,so in time of maturity, the maturity amount can be collected  any near by branches or else in chennai branch only 

  36. Sharath gowda says:

    Hi , I purchased NSC bond on 19th dec 2010. I came to know that we can also withdraw or break NSC after 3yrs with less returns.kindly confirm whether this option is available . Thanks in advance!

    • Suresh KP says:

      No sharath. As per my knowledge you cannot break NSC before maturity. In case you need any urgent money, you can keep this as security with any bank and get loan on NSC

      • Sharath Gowda says:

        Suresh- Pls. go through URL- We can withdraw NSC exactly after 3 yrs with less income. I also enquired with one the local post men, he also said , withdrawal is allowed after 3 yrs.

        • Suresh KP says:

          Sharat, this is surprise for me. As per my knowledge nsc can be withdrawn only by legal heirs in case of death or the person with whom it is pledged and defaulted or by Court order. Get clarity before proceeding

        • bemoneyaware says:

          From what I know

          If the Certificate is encashed within one year from the date of certificate, only the face value of the Certificate shall be payable.

          If the certificate is encashed after expiry of one year but before the expiry of three years from the date of certificate, an amount equivalent to the face value together with simple interest is payable.

          The amount payable after expiry of three years from the date of the certificate for NSC issued before 01.04.2012  used to vary depending on time frame. Now one cannot withdraw. The article referred was written in Oct 2011 so it is true but Suresh is also right for NSC after 01-Oct-2012



  37. shiv anand says:


    What are the instruments which will give tax free maturity amount otherthan PPF?


  38. Ray says:

    My query is regarding tax liability for a 10cr nsc investment assuming I fall under 30% bracket I would be liable to pay 27l in tax for the first year but my salary would be less than the tax liability and since NSC Interest is cumulative is it advisable to invest in NSC ?

    • Suresh says:

      Hi Ray, Why do you want to invest in NSC ? You are not looking for tax savings. So go for tax free returns like investing in tax free bonds or atleat in PPF where you would get similar interest, but your returns are tax free.

  39. abhishek tripathi says:


    i bought NSC amoutning Rs 20000 in dec 2008 in trivandrm branch but since then i have transferred to other location and currently i am resisiding in ahmedabad . it is not possible for me to visit trivandrum , now how can i withdraw my money after maturity.


  40. ajay sharma says:

    I have taken NSC in 2010 now I wanted to encash it prematurely is it possible or not please suggest me.

  41. Madhav Kulkarni says:



    During India, my son used to take NSC certificate of Rs. 10,000/- on his name and his spouse, name.  Now that the maturity starts in October, 2013 per month, but my son and DIL are in USA. 

    The postal authority says that you cannot claim the amount on authority letter given by my son and DIL, as they are in USA.

    Is there any solution who to get the money back.  FYI my son and DIL are coming to India for short visit of 3 weeks in December 2013.


    Madhav Kulkarni.



    • Suresh says:

      Hi Madhav, As per my knowledge there are no alternative methods. However note that till the time you take the maturity amount up to 2 years, you would get normal bank interest only. Hence you need to take out this money and invest somewhere to get good returns. 

  42. Roshani says:

    I had invested 50000 in NSC in 2008 now it will get matured in 2013. I have using my two different signs but now i am not remembering which signature i had used while filling up NSC form. How I will come to know which signature i had used?

    • Suresh says:

      Roshani, You can contact post office and they should be able to help to identify the correct signature. I don’t think there is any other short-cut

      • deepak says:

        Hey Roshini,

                         Hope you are doing well?, ok coming to the point, my postal agent generally advises me to keep a xerox copy of application or any related documents after dfilling it, so that this can be used as an reference copy and more over, the ambiguity factor is totally gone, as of now you can approach the postal office, but for the coming days i advise you to definitely have a xerox copy for reference.




  43. deepak says:

    Thanks a lot suresh, for the detailed explanation.

                                             Can i link this scheme to any of my savings accounts, because as your aware that these days we have become so addicted to linking of accounts and it's visibility online. and it would be good enough because we can keep an eye on the linked account.

    so please help me with this regard.




  44. Harish says:


       Thanks a lot explaination on NSC.I have 1 small doubt lets say I have got a NSC for Rs.10,000 this year 2013-2014(F.Y) and show it under 80C I will not have to pay tax for Rs.10,000 ( for 10% slab Rs1,000).Now I should pay tax for

    1)At the end of the 5th year for 10,000+ the interest amount                   OR

    2)Every Year only for the interest amount say 8.5% i.e. Rs.850              OR

    How much tax should I pay and for which year should I pay


    Thanks in advance

    • Suresh says:

      Harish, 1) You would claim Rs 10,000 u/s 80C and you would get exemption from taxable income upto Rs 10,000 (max of Rs 100,000 u/s 80C) 2) The interest is accrued every year. Means this should be treated as “Income from other sources” and pay tax on that. However you can claim this amount u/s 80C again after 1st year. Means once you complete 1 year, you can include Rs 850 u/s 80C and claim deduction and also show “Income from other sources”. Net you need not pay tax. The catch is if you already exhausted Rs 100,000 u/s 80C. You cannot claim NSC Rs 850 interest. Then you need to show this Rs 850 as income from other sources and pay necessary tax. This you should pay after one year completion, 2nd year completion…. till the NSC matures.

    • Harish says:

      Thanks Suresh,

      Also few of my friends were telling that we can should this 10,000 under 80C in for the 5 years and get exemption from Tax which I was finding difficult to agree.Now got cleared

      2013-2014- Buy Rs.10,000 NSC get Tax exemption depending on tax

      2014-2015  show Rs850(Interest from NSC) under other income and pay tax for it OR get exemption for this Rs850 if we have not completely used 1Lakh under this year 80C

      2015-2016  same as above  2016-2017 same as above  2017-2018 same as above 

      Even if it is Rs10,000/ Rs.1 Lakh same procedure

      Thanks a lot Thing is dont understand this tax,interest,investment etc I am very very weak in those thats why so lengthy explaination :D :D

      • Suresh says:

        No one would agree that you are weak. You have very well explained. BTW what do you do and where do you invest money? What your friends say about good investment options ? Feedback would help me where people are putting their focus so that my articles would be based on that

  45. Marita says:


    Can you please advise me the procedure for redemption of NSC certificates.

    Are there any separate forms and where I can get them as I am presently out of India.

    Are there any forms available online?

    • Suresh says:

      Marita, There are no seperate forms available. You need to surrender your original NSC certificate by signing the documents. Based on this, Post office would issue a cheque. I do not know whether post office people would accept orignal NSC certificates other than you as you have invested in them. If your family members are there, you can try that

      • Mike says:

        Hi Suresh,

        A follow up question here.. was trying to find out what documents are needed for redemption? Also, how much in advance can i go ahead and apply for redemption? My NSC matures on 29/12/2013. Will the Check reach me on my new address if there is a change of address? Is there a procedure where i can get our great Indian Post Office to transfer the amount to my bank account directly, if yes, how much time are we looking at. Forgive my Skepticism when it comes to the IPO, i have had terrible experiences every time i stepped into a post office. Sorry for multiple questions :)

        • Suresh says:

          No problem Mike. You can get redemption at the date of maturity. You cannot do it in advance. When you handover your NSC document, they would give then and there a cheque for the maturity amount. As per my knowledge they would issue cheque and cannot transfer the money to any account. 

  46. Gireesh hegde says:

    Hi suresh,


    i invested INR 10000 in NSC in October,2002, which matured in 2008 with maturity amount of INR 16959. Since I moved abroad around 2005, I forgot to claim the amount till lately. I submiited the certificate on 2nd September, 2013 to the post office.  kindly inform what would be the amount which I am entitled from post office. I am yet to get to clarity on this issue from post office. will there be any tax deduction by the post office while issuing the total amount?


    • Suresh says:

      Hi Gireesh, Post office would not deduct any TDS. You should get 8.5% interest rates for 2 years and after you wuld get only saving banks interest rates of 4% per annum. 

  47. TWINKLE UBERAI says:


    • Suresh says:

      Hi Twinkle, Yes there could be problem at maturity. My suggestion is to go and amend this with Post office now. They can modify and put a stamp so that you would not face any problems in future. 

  48. Kapil says:

    Dear Suresh,

    Some info in this article is wrong. NRI's are allowed to invest in NSC.

    please rectify,



  49. Dennis Joshi says:

    Hi Suresh, I need your help, would really appreciate if you can help me, My father worked in Delhi for few years around 07/08 and had a naional saving, now its has been matured and he wants to withdraw. He is nepalese and in nepal at the moment, he doesnt wanted to travel to delhi for so he arrange his friend their to collect for him, Can he do that, if so which form from online should he use?

    • Suresh says:

      Debbuis, There is no online form. Also as per my knowledge, your father only need to withdraw such NSC. However can you please check with any of the post office whether there is any recent change to provide a letter of request to withdraw such NSC.

  50. vivekanand says:

    Hi, I had invested Rs 25000/- in NSC in Decemebr 2009. When will it get matured?? I urgently need money.


    • Suresh says:

      Hi Vevekananda, NSC maturity is 5 years now. Means you would get money during December 2014. You can consider taking loan on these NSC’s. 

      • vivekanand says:

        Hiii Suresh, thanks much for my query. I have one small doubt. Suppose I want to consider taking loan on NSC's. Can avail this anywhere.(Home post office is in Chennai but right now I am in Nashik).




        • Suresh says:

          Vivekanand, You can consider taking loan from any bank on NSC. I do not have any idea whether in post office you can get loan on NSC. You can check at Nashik and let us know so that such info can be shared with other readers or users.

  51. palaniappan says:

    Dr Sir , i am sending money to my wife to SB a/c. every month she has investing around 40-50 thousands in FD for 1 year  and continue renewal after maturity. every year she has submittig 15 G form .

    she has  eligible to pay income tax or not?pls explain me .

    • Suresh says:

      Palaniappan, Since your wife does not have any other income, as per income tax rules, such FD interest will be added to your income and income tax has to be paid. If you can prove that such amount is earned by her, she can get tax benefit up to Rs 2 Lakhs and above that she needs to pay income tax as per income tax slab.

  52. Mukta says:


    i had invested in NSC in 2007 at my native place Assam, it's mature to withdraw now. But i am currently staying out of Assam. Is it possible to withdraw the money by my family member(they are in native) if i send an authorization letter.


  53. khirod says:

    sir, please let me tell, NSC In post office, can we check our status of NSC in on line, what ever we have purchased in previous years 2010,11, &12? 

  54. Bhasyakarulu Kottakota says:

    Hi Suresh,

    I have purchased NFC bounds when I was in India. Now I am in USA and unable to encash those bonds. Will they earn any interest after maturity.

    Thanks in advance.

  55. deepak says:

    Hey Suresh,

                         How Are you doing?, despite being a fresh graduate from college, i still enjoy reading your articles, ok my q is can i open the nsc in any of the desired locations?? and what is the eligibility and documents required for the same and so give me the with drawal procedure and also can i break it in between?

    • Suresh says:

      Deepak, Thanks, I am fine. NSC is a investment product and not account. You can purchase this from any post office across the country. However you can get maturity amount only from the post office where you purchased. There is no eligibility. You can just pay money and buy them. You need to specify address while filling the form. You cannot break it. But you can get loans from banks in case of any urgency. But why do you want to invest. Unless you are clear about your objective, don’t just invest. If you are looking for tax saving options, ok, but since you are a fresh graduate, I do not know whether your income exceeds taxable income or not.

  56. sunny says:


    Hi, I had invested 10000 in NSC and it gets matured on March 2013. But I withdraw the amount in April 2013. I have shown this NSC amount under 80C when I created it (i.e. FY 2006-2007). Can you please let me know when should I pay tax on the interest earned? Should I pay tax on FY 2012-2013 as it was matured on March 2013 or should I pay tax on FY 2013-2014 as I withdraw the amount in April 2014?

    • Suresh says:

      Sunny, Generally interest earned has to be shown in the same financial year. As per my knowledge people would show this as “Income from other sources” and this interest can be claimed under 80C. Means if you have not exhausted 80C, you can add this as income as well get exemption in 80C so that the interest would not get taxable. Since the amount pertains to last year, you should include in your income and check whether your 80C is exhausted. If not, you can claim as exemption under that. Else you need to pay tax

  57. Anu says:


    I have bought NSC certificates over a few years from Chennai and Bangalore, now most of them have matured, and maybe some over 2 years…but I live in Mumbai. Is it possible for me withdraw it in Mumbai or will I have to go back to the PO of origin? Or can I post it? or is there any other option?

    Thanks in advance for your reply!

    • Suresh says:

      Anu, You cannot withdraw NSC from other places. You should go back to place where you originally purchased. However, you can transfer the NSC from one place to another place when you move on transfer and then take refund from your new address.

  58. bemoneyaware says:

    Thanks for info. You saved me a google search

    But I want to know more about taxability of interest in NSC – I mean when do I have to pay tax – every year or at end?

    • Suresh says:

      Hi Kirti, Point no.1) If we are showing the accrued interest every year under “Income from other sources”, then we can claim interest income as deduction under section 80C. Means we are showing as income and tax exemption, net there is no impact on tax. We can show this from 1st year to 4th year. This is based on the assumption that we are reinvesting the interest. However after 5th year, you are not re-investing, actually it is maturing, hence you cannot claim 5th year interest as benefit.

      Point no.2) If you are not showing as income and getting tax benefit every year, after maturity, entire interest amount would be treated as “Other income”  and would be taxed as per individual income tax slab.

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