National 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 ₹ 500 and in multiples of ₹ 500 / ₹ 1,000 / ₹ 5,000 / ₹ 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)
- ₹ 100 invested in 5 year NSC would fetch ₹ 151.62 and in 10 year would fetch ₹ 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 ₹ 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.
Taxability
Investment in NSC up to ₹ 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 ₹ 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.
Maturity
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 (₹) | Maturity date | Maturity (₹) |
|---|---|---|---|
| 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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Suresh
National Saving Certificates
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This information is outdated. update article
what will happen to the NSC, if the purchaser dies before withdrawal of NSC?
NSC Register no.114496valsad post office. Nsc no.331313 363979 (2) 960 122134 (3)95DD 88449 (4)06EF 855745 total Rs.16500. Date of maturity.
hi
i read it on internet that from 2016, KVP and NSC are no longer provided in physical form and are available in e-mode or passbook mode. please clarify.
i also want to know can NSC be gifted to someone
Is it possible to gift nsc to family member?
hi i need to make new NSC hw to get do and what all documents needed to make.
Please guide me ….urgent
Sir
My father purchased the 6 years NSC of Rs. 38000 and deposited in the Sale Tax Department for Guarantee, now the NSC is matured so how he claim this
Hi Harshita, Unless you take it from sales tax dept which you gave for guarantee, you cannot take NSC maturity amount.
What’s the mode of payment to be made to purchase NSC at post office
I am a resident of odisa.can I buy a NSC at AP?
Can I buy it online.
Sir by mistake we laminated the nsc bonds worth of 2500/- . how can we aproach to collect the amount. They r not accepting laminated bonds. Where we should submit. Please help us.
(1) In Feb 2017, can NSC be purchased by a resident Indian wife as the first applicant, and her NRI husband as the second applicant ?
(2) A resident Indian who bought NSC in March 2014 (maturing in March 2019) has become a NRI in 2016-17, can he hold the certificate as NRI ? (If he can not hold the NSC, then, how should he dispose it off ?)
I have taken NSC bond worth 40k in 2011 January for 5 Years Maturity. Unfortunately i have lost my certificates. Can someone let me know how can i get duplicate certificates.
Sir, My father (who died in July 2016) used to manage my brother’s (he and his family immigrated and are citizens of New Zealand since 2002) finances and he invested some amount (bonafide Indian funds) in NSCs VIII series in 2009. These matured in 2015. Now, when I went to the post office they said in the first instance NRIs cannot invest in NSCs. But, in your website above you said NRIs can invest in NSCs. I checked another website (Taxguru) which said NRIs cannot invest in NSCs. Can you please clarify on this issue. The second issue is my brother’s family holds New Zealand passports and have no other Indian IDs, which the postal authorities said were not recognised as appropriate IDs. Alternatively, they suggested I obtain from my brother Power of Attorney for payment to me, authenticated by Indian High Commission in New Zealand, but they are refusing to do so. In this situation, please advice as to how to go about the issue. No one here is able to guide be properly on the issue. I will be very obliged if you can give me the extant rules in this regard. With regards, Goutham.
My father had bought NSC worth 20 Lacs, but with post master advice he did for 10 years instead of 5 years. He is retired 3 years back, and this was his retirement money.
Now he is hospitalized for last 15 days at Apollo Kolkata. We need money very badly as he has no liquid money.
Post Master is saying he needs court order to liquidate.
Please guide how to make a Court order.
Rgds
Amit Prasad
9831004090
hi, i have a SB account in post office in rajasthan……and i took NSC of 10000 INR. Now i am in bangalore and want to buy NSC 10000 INR under same accoint. but post office is telling to open a new account. please advise me the correct process.
CAN NSC BE PURCHASED ON MY GRANDAUGHTER;S NAME BY ME?
ys of course with nominations
Hi Suresh,
Thanks for explaining it so nicely. But I have one doubt. You mentioned NRI’s can invest in NSC but I have seen most of the websites saying NRI can’t. Can you please clarify if NRI can really invest in NSC? Thanks.
Rakesh, NRI’s can invest in NSC. Pls approach any post office and they can guide you further.
Sir, NSC available in Post office. pl. confirm.
NSC’s are issued only in Post office Rambaboo
my father had purchased a NSC certificate from hutbay postoffice(pin:744207) undo HPO Port Blair
on Maturity whether the nsc certificate can be encashed at HPO Kottyam(Pin:686001),Kerala
Hi Suresh,
Thank you so much for sharing the knowledge these topics are very helpful.
I have a doubt on NSC bond. Suppose in 2016 if i purchase 1lac NSC bond this will help me save tax under 80C section for FY16-17 or will i gt the tax benefit for the next 5yrs as the bond has lock in period of 5years. Or do i have to invest 1lac every year to avail the tax saving benefits under 80C section?
Please advise.
Syed, If you invest once, you would get tax benefit for that year. If you do it every year, you would get tax benefit every year u/s 80c. Each and every NSC certificate you purchase would have its own maturity period of 5 years from the date of purchase.
I have NSC but my father name maintain with wrong spelling what I can plz tell me
to day I purchased NSC of rs 3 lakh. I got 5 printed and 25 hand written (on NSC paper) certificate. will be any problem.will be any prblm on maturity for 25 hand written certificate?pls let me know some pls help
Hi Ashok, It should not be a problem. Most of the post offices are still providing in writing
I have took the nhc on 26/05/16 but I still not received certificate. Pls advise the time period for new certificate.Thxs mitesh gandhi.
Mitesh, NSC’s are issued then and there. Talk to post office staff
i am ramakrishna i purchased i lakh NSC from post office how could i get a lone and in which bank
you can approach any bank
I am tarun sharma i purchase 1 lakh nsc from post office in march 2014 but now i need to received the money if said nsc.how it possible to take the money before maturity they are only for 5 years.
there is no pre-mature withdrawal in NSC Tarun. If you are in urgent need of money, you can keep them in bank and get loan which carries less interest
Correction pune post office viii series.is tax exemption only one lakh
Post office st pine wanted more than 15 days for issue of nsc III series after receiving money in cash.what is the tracking mechanism and why post office want such longer period r s mohan
My nsc of 5 years is matured month only .. How do I encash it and how long will it take to process ? Please help ..
What is the procedure to get payment of nscs from p.o.? The nscs were under bank’s lien for raising loan fm bank. The loan cleared and bank has released nscs with letter to p.o. for cancelling the lien and pay the amount due on maturity i.e., 18th of March 2016. I Approached the p.o. with nscs and bank letter. The p.o. has said we willverify. Come after 10, 15 days.
May I know the procedure please and how much time will p.o. take for releasing payment.!
Thanks and regards
Shall be grateful for yr reply.
A K Sharma
Oceon@rediffmail. Com
1] how many days it takes a NSC certificate to be issued from post office.
2) After issuance of certificate if any emergency can I withdraw it from post office any time during the year
hi,
my daughter is overseas and the 5years certificate is maturing next month. my question is
1. ) what are the consequences if we do not withdraw the amount on the date of maturity, but withdraw after 8 months
2. ) the post office requests for a power of attorney attested if someone on her behalf has to encash the amount, but online there is no mention of the same online except for an authorization letter to be filled by the certificate holder.
can you please advice
Hi JS, Nothing would happen if you withdraw after 8 months. you would get normal SB interest instead of NSC interest after maturity. Alternatively you can give necessary docs to post office and withdraw before your daughter comes back to India
Hi,
I have bought the NSC for 40,000 last year and I have declared in 80c for 2014-2015.
The interest accumulated in that NSC is also eligible for 80 c tax .
When I checked with the post office in Pallavaram, Chennai, they told me the interest will be calculated after 5 years only. In that case, how could I declare my interest for the current financial year ? Please advise on this.
I did not have any details other that the NSc bonds.
Any help on this is much appreciated.
Thanks,
Praveen
Hi Praveena, You can refer this article which has good detailing about NSC interest to be shown in income tax return. http://www.bemoneyaware.com/blog/how-to-show-interest-from-nsc-in-income-tax-return-itr/
hello
Kya NSC me one time invest krna hota ha ya monthly or yearly hota ha
Regards
pankaj
Pankaj, it is one time
Hi ,
Is it possible to purchase and apply for NSC without nominee details? also can the nominee details be added later?
i bought the NSC in my fathers name, can i claim tax deduction because my father is not working and therefore is outside the tax bracket
No Suraj. It can be claimed by the person who bough it.
i hv bought an nsc from manglore but lost all papers regarding this .how cn i apply for a duplicate certificate online?
Hi
My Brother has invested my money in NSC in his name and I have the certificates is it possible to en cash it with out involving him on maturity
no it is not possible
I have purchased NSC in Mumbai PO and now , I have move to Bangalore. The NSC got matured and I want take money, shall do it in Bangalore ? If yes what are documents required.
Raman, some Post offices are allowing, however not all of them. You can check with your local post office about this
how long will it take to buy NSC from post office like entire procedure. Any leads?
It takes 30 mts to 1 hour depending on the crowd at Post office
You can go to the nearest post office to purchase the National Certificate. after 5 years you will get your amount back with Interest. Remember the interest is taxable on maturity of NSC. At the time of maturity, Post will give you a Draft or Cheque (Account Payee), so to reimburse it you need account in Bank. Hope I addressed your concern.
Hi .. M thinkin of buyin nsc bt i don’t knw weather to open an sb account before buying and d interest can be withdrawn only after 5 years of maturity or before that
planning for investment for my child who is now of 3-4 months , I have already started three SIPs of 3000 each with SBI, Now I am thinking what else can be done, Should I invest in NSC’s or opt for Sukanya samriddhi Girl Child policy for the best returns on investment. please help
Nsc can be redeemed after 5 or 10 years as the case maybe. Interest is taxable on maturity. Sukanya Samridhi is a long term investment. Interestistaxfree. Your decision should be placed on when you require the money, depending you upon your planning.
Thanks a lot sir it is very informative.
I had purches 6yr nsc as on 11/08/2009.print rate on certifite is rs 20150. Now Postoffice retern me rs 16010 only. Is it right.
Prakrati, If print rate is 20,150, they need to pay you that much amount. However if you invest Rs 10,000, you would get only Rs 16,010. What amount you have invested?
If i done 5year plan of nsc in 10,000 Rupees than any circumstances if i want money after 1year or any other time we break the nsc or not.
IT WAS A GOOD PIECE OF INFORMATION BUT LET ME KNOW IF I INVEST 1LAC TODAY AFTER 10YRS WHAT WILL I GET FROM MY NSC AFTER TAX DEDUCTION. HOW MUCH MONEY WILL BE DEDUCTED. BECAUSE MY TAX SAVER IS 1.5LACS IN PPF
Hi , If I need to buy 6 certificates on 6 separate days then will I have to fill the same serial number in each application form or different ?Kindly let me as soon as possible . I do not want to buy through cheque but cash .
So Person in the post office advised me to buy 6 certificates on 6 separate days.
thanks with
regards
Anubhav
Hi, I bought the NSC for 5 years in 2010, while in India and i am currently in USA. I have no plans to visit India in next 2 years.
1. Can you suggest me how to redeem without visiting India?
2. Is there any way to extend to 10 years?
Sir, I have purchased nsc bonds in Visakhapatnam district. but presently iam working in Rajasthan. can I claim my matured amount at rajasthan post office branches.
Most of the post offices are not accepting to give maturity amount in branches other than where it was brought, you can give a try
Sir I hold a NSC which I had purchased in my home town. But I stay in Mumbai. Can I get the maturity amount in Mumbai. What is the process?
Rajiv, Post offices are operating in their own way. While some post offices are accepting this, others are not. You need to go to your home town to get maturity amount
Hi Vinay, you will get whatever the amount is written on NSC certificate while issuing it to you. Hope this helps!
\
No , you can not break it. Although if you required money you can take lone againt it but you canot break.
Is there any way by which we can enroll or register policies for National Savings Scheme or Kisaan Vikas Patra in Indian Postal website online which we have already purchased. Also if there is a way what are the steps for doing so ?
This post offices are not yet developed. the systems are not in place. we have to withdraw in a same post office were we purchased this bonds. very very Ridiculous.
Sir I patches nsc since 2013 for 75000 $ but suddenly I need some mony their for I want to withdrawal thet nsc . I went to post office & trying to withdraw but they told me its not withdraw befor muturing how it can possible that my money not gave me oh good is that true some way sagged me how I can withdran
sir I want to cancel my nsc of 10 years but i am facing problem that it can’t be break. please solve my problem that how can I break nsc.
Respected sir
I have been purchased NSC bond for the financial year 2008 and maturity year 2014… my doubt is in the 2008 i was working at Vizag and purchased at head post office vizag, but now im working at hyderabad… is it possible to claim my matured amout at hyderabad post office or i have to claim at vizag only…
Some post office are accepting it. However majority are saying we should collect at home post office where we purchased
If i get a NSC of Rs 10,000 and after 5 Years (Maturity) it’ll be approx Rs: 15,162, My Question here is after 5 years do i get Complete Rs 15162 or will they deduct any tax on 15,162 and will give me the remaining amount,?
.
Dear Suresh,
I purchased nsc worth 20,000 in mar-2008. It got matured in mar-2014.
Now when I went to post office to redeem it, post master says that we should open a SB account in post office to redeem this.
I asked the reason, so he said that as the amount which will be redeemed is more than 20,000 (around 32,000),
so for this amount cheque or cash can’t be given.
So they will transfer this amount to the post office SB account and then I can withdraw this.
Is this right or has he given false information?
As far as I remember, we used to get cheque.
Thanks ,
Pankaj
He is correct dear
Dear Sir
My wife used to purchase NSC when she used to work in India. After leaving India, she lost complete track of them as the papers were with her mother. We suspect that they have been cashed out on maturity. However, we are not able to discern the amounts of the NSC that were cashed out. Is there any way to track the old NSC numbers and check how many NSC were cashed out and when. My wife has a valid PAN card.
Thanks
Hi RC, Unfortunately, these are not tracked based on any account no or PAN no. The holder of the NSC has to counter sign before cash / cheque is issued to the NSC holder, hence there should be very less chances of someone getting encashed.
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.
Hello all,
I read all your comments about pre maturity for NSC bonds. MIS is something that we can able to do the pre maturity after 1 year, but not the NSC bonds.
1. For MIS ————> We can pre mature the bond, but we cannot get bonus out of our investment.
2. For NSC————> We can’t do the pre maturity, but pledging can possible in the nationalised bank and the interest rate is high.
3. Post office cannot do the money transfer to any bank after maturity. We have to deposit our check once we get it from post office after maturity.
Even I’m in need of doing prematurity for all my NSC savings bonds at this point, but not too sure about it. Please double check all my above comments once again with the post office people from your end. If any changes, please keep me updated here and will check it out later onwards.
Sir,
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.
Hi
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
Regards
Hi,
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 ?
Thanks.
Its bery difficult to redeem NSC purchased from post office in different city..in 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..
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
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
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
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?
Thanks
Anita
Anitashan, You can encash now. Just carry NSC certificate, thats all
Hi sir,
i purchased nsc in 2004 june in dehi.now 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.
regards
nitin bhatia 9719234558
Dear Sir
Greetings.
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.
regard
Pradhan
Darjeeling
when i purched my nsc in aug. 2014 that will be count wicth financial year!
It would be counted in this financial year 2014-15
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?
Hitesh
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.
Shree, it is important that signature matches. Why don’t you talk to post master and tell your problem in case you cannot make out in person ?
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
No Srinivas. You cannot break it in between. However you can take short term loans from banks by providing them as collateral security.
i have purchased NSC from vasai(thane).Now after maturity can i encash it in mumbai post officces ????
Hi Makarand, Some of the post offices are accepting this and some are refusing, pls visit nearest post office and try
please sumone reply
already replied, pls check this link https://myinvestmentideas.com/2013/04/national-saving-certificates-nsc-a-complete-guide/#comment-35630
iI have purchased N.S.C. from bhiwani- haryana, but now i an living at lucknow u.p is it possible to surrender the n.sc from lko post office after mature. what is the procedure behin it.
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
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.
Hi,
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.
Thanks
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.
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.
Hi Walter, Please file complaint in Post office URL http://ccc.cept.gov.in/PCData.aspx Please select NSC and give all relevant details. This should be addressed within 1 week
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.
2.as 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.
4.as 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!
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 ?
Dear Suresh,
Firstly thx for your kind response and valuable suggestion.im 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
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
Sir,
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.
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.
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.
Can i buy NSC on back date ?
No Rajesh, you cannot buy NSC with back date.
Dear Team,
I wanted to take NSC as Rs. 3000 PM plan. Is that possible. please reply
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
Hi,
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.
Thanks,
Mitra
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.
Hi,
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?
Poonam, Since they are not yet online, the only way is to approach nearest post office and enquire with your xerox copies.
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.
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.
Sir,
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.
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.
Thanks
Raman Kunwar
Delhi
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.
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
Subbarao, I heard you can approach your nearest post office and enquire. Pls check
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.
Thanks
Nep
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.
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.
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.
Hi,
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?
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
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.
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
You can encash in any post office in India
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.
Padhma
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.
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?
Regards,
Mangesh
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.
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?
Hi Sidhes, Yes I think after 2010 the change happened. Currently they are available in 5 year and 10 year period.
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,mumbai..is this true? then where to buy gold? please suggest me what are the best options for buying gold.Thanks.
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.
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
Hi Sushma, Unfortunately NSC’s have to be redeemed only from original post office where you purchased. I wish post office would improve on this.
It can be encashed from any post office on written application to them.
Vinay, It is surprise to me. Thanks for updating this.
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!
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
Suresh- Pls. go through URL-http://www.investmentpaths.com/resources/3859-National-Savings-Certificate-NSC-details.aspx. 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.
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
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
Suresh,
What are the instruments which will give tax free maturity amount otherthan PPF?
Shiv, Looks you have not seen this article. I have written an article about best tax free investments in India. You can check and revert for any further queries. https://myinvestmentideas.com/2013/05/best-tax-free-investments-in-india/
Thanks boss!
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 ?
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.
hi
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.
Abhishek, Unfortunate thing is you need to visit home branch of Post office where you have taken NSC to get the maturity.
I have taken NSC in 2010 now I wanted to encash it prematurely is it possible or not please suggest me.
Ajay,Premature withdrawal is not allowed in NSC. In case you need urgent money, you can pledge them any bank and get loan
Sir,
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.
Regards.
Madhav Kulkarni.
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.
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?
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
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.
Regards
deepak
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.
Thanks
Deepak
Hi Deepak, Currently NSC is not available online. You need to go to Post office and get them. Even to redeem you need to follow this manual process.
Thanks yaar.
Hi,
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
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.
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 😀 😀
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
Hello
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?
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
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 🙂
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.
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?
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.
I HAVE BOUGHT NSC IX IN THE NAME OF MY DAUGHTER WHO IS MINOR BUT BY MISTAKE HER DATE OF BIRTH HAS BEEN WRITTEN WRONG IN THE NSC CERTIFICATE WHAT PROLEMS CAN COME AT THE THE TIME OF MATURITY OF NSC.
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.
Dear Suresh,
Some info in this article is wrong. NRI's are allowed to invest in NSC.
please rectify,
Thanks,
kapil
No Kapil. If you have family in India, they can invest. If you have any references, please provide so that I can correct.
Hi Suresh,
As I mentioned earlier that an NRI is allowed to invest in NSC, I am attaching the guidelines of RBI regarding this. Please read where it says in bold-"NRI may, without limit, purchase on non-repatriation basis."
Non-repatriation is the only condition that applies to an NRI.
Another reference is myself, I m an NRI and I have NSC's.
Hope it helps!
kapil
Thanks Kapil. Please ignore my earlier response. I have updated now. Thanks for the update.
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?
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.
Hi, I had invested Rs 25000/- in NSC in Decemebr 2009. When will it get matured?? I urgently need money.
Vivek
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.
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).
Vivekanand
9769833235
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.
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 .
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.
Hi,
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.
Mukta, You need to sign the NSC certiifcate at the time of refund. I am not sure whether they would accept authorization letter.
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?
Khirod, NSC is not available online. You cannot check them online.
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.
Bhasyakarulu, You would get simple interest rate (it should be 4% to 5%) up to 2 years period.
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?
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.
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?
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
Hi,
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!
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.
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?
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.