National Saving Certificate

Indian financial institutions and Indian government avails plenty saving options and schemes not only for major investors and corporate houses but for minor and personal saving scheme in various category. Investors will enjoy maximum flexibility, money safety, higher interest rates, benefits in income tax payment and other facilities easily. These specified facilities are combination of various specified facilities that will fulfill all the need and expectations of investors.

National Saving Certificate (NSC) is best example of scheme that offers above describe facility through single plan. This investment policy will make investment easy and will offer relaxation in income tax. Apart from this there are several policies that offer amazing benefits and better financial management service. In 1950, initially bring this concept of investment and saving to bring awareness about this field.


National Saving Certificate Working Process

If are going to invest or planning invest in this policy this you must know about the all the necessary information related to this policy to avoid any collision in future. To make investment reflexive and useful this is quite important step that every investor must take. Users can select plan as per their budget and will receive NSC according to plan that investor has bought.

After completion of investment process, respective authority will receive befits and interest rate according to plan. All the applicable benefits will be available for policy holders after successful tenure or maturity of policy. After maturity of policy investor will receive certificate from respective agency.


Types of NSC Certificate

Basically there are two types of NSC certificate, are easily available at the all post offices. Although just slight difference in their property make them different from each other.

1.NSC issue VIII
This policy and certificate is best for someone who is looking for tax benefits and safe investment plans. Issue of certificate depends on the plans chosen by the investor. Generally these certificate cost between Rs. 100 to Rs. 10000. So choose the certificate and plans as per your budget.

2.NSC issue IX
As far as cost is concern there is no difference in price but this certificate offers advance level facility for all customers. Minimum criteria for investment are 100 and there is no limit for maximum investment and maturity tenure for this policy is minimum 10 years.

To Hold NSC Required Types are

Apart from above describe certificate facility offers by NSC, there are some other certificate offered by this
1. Single Holder Type Certificate
As its name suggest that this certificate is valid for single account holder. Registration of nominee is necessary for policy holder or investor. If case of age factor certificate can be issued in name of any adult or responsible person.
2. Joint A Type Certificate
This certificate is for two or more adult investors and will be applicable for two mature persons. Both people hold the right to allow transactions and rejection of any process. As per need nominee can be changed.
3. Joint B Type Certificate
The thing that makes B and A certificate is tenure of maturity; otherwise there is no difference between Joint A and joint B certificate. As per certificate policy any one can pay the amount as per need.


Eligibility to Buy NSC

As per policy specified by the respective representative, there is some condition that must be fulfilled by the investor.
a. As per issue VIII hindu unified family member and NSC trusts are not allowed to invest under this policy.
b. Only Indian origin person can buy or invest in this policy because policy is for only for people of India.


National Saving Certificate Features

1. Minimum amount that investor can buy is Rs. 100.
2. Under both Issue VIII and Issue IX nomination facilities are also provided to investors.
3. There are no criteria for maximum investment amount.
4. These certificates can be taken by an individual and held as individual investments or taken and held as a joint investment.
5. Nomination facility is available under ISSUE VIII and ISSUE IX.
6. This certificate can be encashed only at the post office from they were purchased.
7. There are also specific denominations in which these certificates can be taken and these are Rs. 100, Rs. 1,000, Rs. 5,000 and Rs. 10,000 under NSC Issue IX.
8. Since these products are useful and specified for individuals, groups of people like companies, trusts, or Hindu Unified Families, cannot invest in them.
9. There is a possibility where an individual can take NSC on behalf of a minor.


Investing Benefits in NSC

Individual can earn maximum benefits as specified below, if they handle these policies carefully,
1. The investment can be used to secure loans.
2. When certificates mature, they can be reinvested in the scheme again by purchasing certificates of a value equal to the maturity value of the old ones.
3. There is no upper limit on the amount that can be invested in these certificates.
4. The interest can be virtually tax free except for the interest that is earned in the last year.
5. The certificates can also be taken on behalf of a minor.
6. Investments made in an NSC come under 80C of the IT ACT and afford the investor tax benefits.
7. If the certificates are lost or damaged, duplicates can be arranged.
8. The interest earned is compounded and reinvested in the scheme by default.


Interest Rate in NSC

As it is obvious that there are initially two types of NSC available, with type there interest rate and other facilities are different with each other. NSC ISSUE VIII offers 8.5% interest rate and NSC ISSUE IX offers 8.8% interest rate. Policy holder also gets the facility to invest their amount that they have earned through interest. Investor will receive their amount only after maturity of policy.


NSC Tax System

NSC offers are based on two types of tax system and offers tax related benefits for these two conditions.

1.Tax Benefits on Returns: Sometimes due to return policy tax may be due. In other cases of investment policy like fixed deposits avails the facility to pay due tax after receiving information from bank and as per their demand. In case of NSC, its investor responsibility to complete these tasks with honesty to avoid any tax related issues in near future. It is important to know that income from NSC interest rate is exempted from tax policy however amount will be used as fresh investment by policy holders. Under section 80C of Indian income tax department tax exemption facility is available for all investors.


2.Tax Benefits on Investment: If someone is investing amount via NSC then he will receive tax related benefits as per IT act policy. In single financial year there are limit of 1.5 lakhs that can be claim for tax exemption. These benefits will be effective and applicable only investment is made under policy.


Important Required Document for NSC

1. Fill the form 1 along with all investment related details like amount and nominee.
2. Supporting documents like address proof and identity proof.


Procedure to Buy NSC

This is quite simple process; however it is not available in online platform, to buy this policy you have to visit your nearest branch of post office and buy application form from there and submit with all necessary documents. Some basic steps are:
1. Enter all important information in application form and specify the amount you are looking to invest.
2. Attach all the required documents.
3. Specify the name and other details about your nominee.
4. Now pay the amount you want to invest via, DD, cheque or cash.
5. Now you can receive or collect your certificate from post office, it will be possible only after successful payment of amount.
6. In case of any minor printing mistake, to get them correct to avoid any other difficulty.


NSC Forms

Basically three types of forms availed by the central government along with NSC, are specified below:


1. Application Form or Form 1

This is initial process to buy NSC, because without this user will not be able to process their request. This form contains two pages; on which first page specify details about the terms and conditions along with other necessary information regarding policy. End of the first page specify the information about customers acknowledgement. Second page contains information regarding official use that also confirmation details about policy. User should not forget to fill all details about witness and signature of them.

2. Nomination Form or Form 2

While buying certificates, in case you forget to register your nominee then use this form to add then in your certificate. In this form you have to enter all necessary information about the nominee you are going to add. Never forget to take sign of that person in last section of form. Always, your witness must be registered in that branch of post office where you are buying NSC.

3.Change in Nominee Details or Form 3

Due to any reason if you want to replace your current nominee then you have to use from 3 to make it happen. Like previous form, in this form too, information about new nominee along with reason to replace current one and then submit this form along with sign of your witness.


Beneficiary Nomination for NSC

If you are nominating someone from your family while buying policy or any certificate, then you will get complete benefits of your investment even after your death, although it is not compulsory to nominate someone before registration. If someone is operating joint plan then in case of sudden death of one person other can continue policy and investment. If both investors lose their life in that case nominee is mandatory. Important points about the nominee are specified below:

1.The change in nominee details will take affect the day it is registered at the post office and not before.
2. Nominee can be registered when the certificates are being purchased using Form 1.
3. If you want to add nominee after buying policy then use form 2.
4. If any change in nominee details in required then use form 3.
5. Nominations and changes to nominations can only be made through the post office where the certificates were originally purchased.
6. If the nomination is being changed on certificates that were purchased on different dates, the nomination forms will have to be separate for each certificate.
7. If the holder is illiterate they will attest the forms with a thumb impression and the witness will have to be people known to the post office.
8. A minor can be nominated as a beneficiary.
9. If a certificate has been bought on behalf of a minor then nominations are not permitted.
10. If the denomination of the certificates is less than Rs. 500 then only one person can be nominated for each certificate.
11. If policy holder passes away without having made any nomination, the amount held in the NSC will be paid to any family member of the holder.


Premature Withdrawals from NSC

Premature withdrawal facility will be available in case of following condition:
1. As per SC order NSC can be paid prematurely.
2. In sudden death of NSC holder.
3. The holder of the certificate has seized them through the pledge.
Conditions that will play prime factor in amount settlement are:
1. Simple interest will be payable in case of duration is between one to three years.
2. No interest will be paid if tenure is less than six months then only principal amount will be return.


Transferring NSC

NSC allows two types of transfer first one is transferring from one to other post office and second one is ownership or authority transfer.


Transfer from One to Other Post Office

Policy holder can use this facility if they are relocating from one to other venue. This facility will make their task much better and slightly easier for investor. To do submit the transfer form in post office for further processing and in case of Type A and B certificate signature of all investor is necessary.


Transfer from One to Other Person

If any certificate holder wants to transfer their certificate then he should get approval from postmaster where certificate was issued. Apart from this following process is needed:
1. In favor of nominee in case of death of original investors.
2. Court holds the right to transfer from one to other person.
3. If more than two persons are operating this then one can transfer into other one account.
Other factors that will pay major role are specified below:
1. This process is possible after at least one year from date of transfer.
2. Every information must be valid and application must be filled along with signature.
3. If nominee is minor then valid information and documents along with approval certificate is necessary.


Duplicate NSC Certificate

Due to any disaster or other reason if you have lose your NSC, then follow steps described below to find the duplicate copy of your records:
1. To get replica of your documents visit your post office branch from where you got the certificate.
2. You can submit your application form regarding certificate at any branch of post office.
3. Always provide valid details including date of purchase and other important information to avoid any complication.
4. You have to submit solid reason to get duplicate certificate along with proof.
5. Once your certificate will be issued then you will be able to receive it from post office only.


Fees and Charges for NSC

In following condition, just IRN 5 is payable to NSC:
1. When the nomination is changed.
2. When the denomination of the certificate is changed.
3. When the nomination is made AFTER the certificates have been purchased.
4. When the postmaster issues a certificate of discharge upon encashment of certificates.
5. When the certificates are transferred from one person to another person or an entity.
6. When a holder requests for duplicate certificates.


Loan against NSC

While applying for loan always remember following important points
1. Regarding loan approval, certificate will be transfer in respective bank where you have applied for loan.
2. You can choose bank as per your interest.
3. To transfer your certificate you have to take approval from respective post master.
4. After successful transfer new person will be treated as certificate caretaker.
5. In case of transfer related issues postmaster holds the rights to release new certificate.


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