{"id":10109,"date":"2024-03-26T12:12:45","date_gmt":"2024-03-26T12:12:45","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/03\/26\/looking-to-invest-in-national-savings-certificates-know-all-the-tax-benefits-here-business-times-of-india\/"},"modified":"2024-03-26T12:12:45","modified_gmt":"2024-03-26T12:12:45","slug":"looking-to-invest-in-national-savings-certificates-know-all-the-tax-benefits-here-business-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/03\/26\/looking-to-invest-in-national-savings-certificates-know-all-the-tax-benefits-here-business-times-of-india\/","title":{"rendered":"Looking to invest in National Savings Certificates? Know all the Tax benefits here | Business – Times of India"},"content":{"rendered":"
\"Looking<\/div>\n
Tax benefits of NSC: The National Savings Certificate (NSC) is a government-backed scheme ideal for low-risk investors. It offers guaranteed returns and tax benefits. NSC certificates are available in electronic or passbook formats.
Interest rate<\/span> update<\/span>
The current interest rate for NSC stands at 7.7% for the quarter from April to June 2024. It’s important to note that this rate undergoes quarterly reviews by the Ministry of Finance.<\/p>\n

NSC Tax Benefits Explained – H2
<\/h2>\n<\/p>\n

Tax deduction<\/span> on investment amount<\/span>
Investors seeking guaranteed returns and aiming to avail tax benefits on investments up to Rs 1.50 lakhs under Section 80C of the Income Tax Act would find NSC suitable.
Tax savings on interest<\/span>
According to an ET report, the interest earned on NSC is taxable under the category of “Income from Other Sources.” However, during the initial four years, the interest is reinvested and therefore not subject to Income Tax. This reinvestment qualifies for deduction under Section 80C of the Income Tax Act, 1961. Since the maturity period of NSC is five years, the interest can only be reinvested for four years. The interest earned in the fifth year, along with the maturity amount, becomes taxable. In essence, the tax benefit applies only to the initial four years of the investment period, with the interest earned in the fifth and final year being taxable.
ALSO READ | <\/span>National Savings Certificate: Know the latest NSC interest rate for April-June 2024 quarter<\/a>
TDS<\/span>
Unlike fixed deposits, Tax Deducted at Source (TDS) is not applicable on the interest amount earned from NSC investments.
Eligibility and investment options<\/span>
NSC is accessible to resident Indians, allowing joint investments with up to two adults or even investments in the name of a minor. Interested individuals can conveniently purchase NSC online through the Department of Post internet banking or by visiting their nearest post office branch, offering various payment modes including cash, cheque, and bank demand draft.
NSC Lock-in period <\/span>
NSC comes with a five-year lock-in period, meaning you cannot withdraw funds prematurely. However, exceptions exist in cases of depositor death, forfeiture by a promise from a Gazette officer, or by court order, allowing for early liquidation of the NSC account.
NSC Premature closure<\/span>
NSC cannot be closed prematurely before five years except under specific circumstances, which include:
a) In the event of the death of the account holder in a single account, or any or all the account holders in a joint account.
b) If forfeited by a pledgee who is a Gazetted Officer, provided the pledge aligns with the Scheme’s guidelines.
c) When ordered by a court.
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How to open NSC online<\/span>
Here are the steps to open an NSC account online through DOP internet banking:
1. Log in to DOP internet banking.
2. Navigate to \u2018General Services’ > ‘Service Requests’ > ‘New Requests’.
3. Select ‘NSC Account – Open a NSC account and KVP Account to open a KVP account’.
4. Enter the desired amount for opening the NSC account (minimum Rs 1000 and in multiples of < 100).
5. Choose the Debit Account linked to your PO Saving Account.
6. Click on ‘Click Here’ to read and accept the terms and conditions.
7. Submit your application online.
8. Enter your transaction password and submit.
9. Log in again to view the details of the NSC account under \u2018Accounts’.<\/div>\n