National Savings Certificate (NSC)

Context: A Rs 9.12 lakh investment in the National Savings Certificate (NSC) scheme was recently declared by the Prime Minister in his
nomination filing.

About National Savings Certificate (NSC)

Scheme Overview:

• Description
o A fixed-income investment scheme launched by theGovernment of India.
o Aims to encourage low- to midincome investors to save and invest while also providing tax benefits.

• Investment Details
o Eligibility: Available to resident Indian citizens. Non-resident Indians (NRIs) and entities like Hindu Undivided Families (HUFs), trusts, and private/public limited companies are not eligible.
o Application: Can be invested in personally, for a minor, or jointly with another adult.
o Purchase Location: Available at the nearest post office with required KYC documents.

• Key Features
o Interest Rates: Earns a fixed annual interest, revised quarterly by the government. Guarantees a regular income.
o Maturity Period: Five years.
o Investment Limit: No upper limit on the amount of NSCs that can be purchased.
o Tax Benefits: Principal invested qualifies for tax savings under Section 80C of the Income Tax Act, up to Rs. 1.5 lakhs annually.
o Accessibility: Easily bought and transferred between post offices or individuals without affecting interest accrual or maturity.
o Loan Collateral: Accepted as collateral or security for secured loans from banks and NBFCs.
o Nomination: Allows the investor to nominate a family member (including minors) to inherit the investment in case of the investor’s demise.
o Premature Withdrawal: Generally, not allowed, except in cases of the investor’s death, a court order, or forfeiture by a pledgee who is a Gazetted Government Officer.

• Eligibility Criteria
o Individual must be a resident Indian citizen.
o No age limit for individuals to purchase NSC.
o NRIs, HUFs, trusts, and private/public limited companies are not eligible to invest in NSC.

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