National Savings Certificates (NSCs) have been among the most popular tax-saving options for ages. In spite of the advent of market-linked investment products such as equity-linked savings schemes (ELSS), the certificates have retained their charm for certain sections of society. In this column, let us discuss the various facets of this special instrument of investment.
Salient features
NSCs can be brought from major post offices across the country. You can purchase them with cash, cheque or demand draft. Investment in NSCs is eligible for deduction under Section 80C of the Income Tax Act up to Rs 1.50 lakh per annum, together with other eligible items like life insurance premium, ELSS investments, tuition fee for school-going children, Public Provident Fund contribution, principal repayment of housing loan, five-year bank fixed deposits, etc.
In addition to the initial investment in NSCs, the accrued interest for all years except the year of maturity is also eligible for deduction under Section 80C within the overall limit of Rs 1.50 lakh. To explain: the interest you earn on your NSCs every year is automatically re-invested for the duration of the product, i.e. for five years, in case of the current scheme. Under Section 80C, you can show this re-invested interest amount in your tax return and claim exemption up to Rs 1.5 lakh.
NSCs can be pledged as security for availing any credit facility with a bank after permission is obtained for making for such a pledge. The certificates can also be encashed before their maturity period under certain circumstances such on the death of the holder or following an order of a court.
This story is from the December 2016 edition of The Finapolis.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 2016 edition of The Finapolis.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
7 Ways to Prevent Text Neck
Our head is heavier at an angle than it is at a neutral position. That means our increasing usage of smartphones for reading, texting, etc is putting undue pressure on our spine
How To Take Your Networking To Next Level
Networking is one of the best ways to use your time
5 Fun Ways To Save Money
There are several simple ways to reduce spending and rack up more cash. Sukanta Kundu lists some interesting ones.
In Search of Higher Returns Amid Falling Rates
As Bank Deposit Rates Fall, Even Conservative Investors Are Switching Assets. Where Can They Go?
National Savings Certificates Help as Interest Rates Fall
National Savings Certificates (NSCs) have been among the most popular tax-saving options for ages. In spite of the advent of market-linked investment products such as equity-linked savings schemes (ELSS), the certificates have retained their charm for certain sections of society. In this column, let us discuss the various facets of this special instrument of investment.
What Drives Us to Invest?
I had made the journey from economics to finance. As part of Keynesian economics, we were taught about the three motives to hold money: the transactions motive, the precautionary motive and the speculative motive; all through my teaching career that remained part of my Keynesian economics. But two decades, later when I immersed myself into the world of investment, I had to develop my own tools to understand the new discipline and make my investors understand the working of their own minds. One night as lay turning on my back, poring over the day’s happenings, suddenly I made a strong connection between what I had studied years back and the problem I was grappling with now: the motives.
Ask The Finapolis
Col. Sanjeev Govila (retd) of Hum Fauji Investments answers readers’ queries on investments, taxation and personal finance. Do you have a question you want answered? Email your question to feedback@thefinapolis.com
Input Tax Credit To Benefit End-customer
Looking at the scale of India, it is reasonable to expect 3-5 years for the system to stabilize
Will GST Really Spike Up Your Bills?
As goods and service providers can claim input tax credit, your net tax bill will reduce say experts
The Bull Run Is Here To Stay
Karvy Finapolis’ event —“Is this the mother of all bull runs?” — evoked a thunderous response from investing public recently in Hyderabad.
