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The certificates are easily transferable from one person to another through the
post office. There is a nominal fee for registering the transfer. They can also
be transferred from one post office to another.
One
can take a loan against the NSC by pledging it to the RBI or a scheduled bank or
a co-operative society, a corporation or a government company, a housing finance
company approved by the National Housing Bank etc with the permission of the concerned
post master.
Though
premature encashment is not possible under normal course, under
sub-rule (1) of rule 16 it is possible after the expiry of three years
from the date of purchase of certificate.
Tax benefits are available on amounts invested in NSC under
section 88, and exemption can be claimed under section 80L for interest accrued
on the NSC. Interest accrued for any year can be treated as fresh investment
in NSC for that year and tax benefits can be claimed under section 88.
Investment up to Rs. 1,00,000/- per annum qualifies for IT
Rebate under section 80C of IT Act.
Return
NSC having a high interest rate at 8.80 % compounded half yearly. Post
maturity interest will be paid for a maximum period of
24 months at the rate applicable to individual savings account. A
Rs 100 denomination certificate will increase to Rs.151.62 on
completion of 5 years.
Advantages
The investment under this scheme qualify for the benefit of Section 80C of
the Income Tax Act, 1961 from 1-4-2007.
Interest accrued for any year can be treated as fresh investment in NSC for that
year and tax benefits can be claimed under section 80C. NSCs can be
transferred from one person to another through the post office on the payment of
a prescribed fee. They can also be transferred from one post office to another.
The scheme has the backing of the Government of India so there are no risks associated with your investment.
How to start?
Any individual or on behalf of minors and trust can purchase a NSC by applying
to the Post Office through a representative or an agent. Payments can be made
in cash, cheque or DD or by raising a debit in the savings account held by the
purchaser in the Post Office. The issue of certificate will be subject to the
realization of the cheque, pay order, DD. The date of the certificate will be
the date of realization or encashment of the cheque. If a certificate is
lost, destroyed, stolen or mutilated, a duplicate can be issued by the post-office
on payment of the prescribed fee.
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