Download Tax Saving Mutual Fund Application Forms
Invest In Tax Saving Mutual Funds Online
Leave a missed Call on
94 8300 8300
National Saving Certificates – A Complete guide
National Saving certificate is issued by Post Offices in India and is a very good small saving scheme. Do you know that investment in NSC can be created in such a way that it provides regular fixed income and can be used as one of the retirement planning options?
In this article we would discuss complete details about National Saving Certificate, how this is used for reducing tax, how the interest income is taxed and how to use this to create regular monthly income.
Features of National Saving Certificate (NSC)
National Saving Certificate is issued by Post offices and is backed up by the Govt. of India.
- NSC’s are available for 5 and 10 years period
- NSC’s are available for a minimum investment of Rs. 500 and in multiples of Rs. 500 / Rs. 1,000 / Rs. 5,000 / Rs. 10,000
- There is no maximum limit
- Interest rates are 8.5% p.a. for 5 year NSC (VIII) and 8.8% p.a. for 10 years NSC (IX)
- Rs. 100 invested in 5 year NSC would fetch Rs. 151.62 and in 10 year would fetch Rs. 234.35
- Interest is compounded every half year
- Nomination facility available
- Individuals, Joint individuals and minor supported by guardian can invest NSC.
- Societies / Companies cannot invest in NSC. However NRI's can invest in NSC.
- NSC's can be purchased at post offices by filling up the application form along with ID proof.
- NSC's are not available online
How NSC’s are useful?
National Saving certificates are purchased mainly for tax saving purpose. Investment up to Rs. 1 lakhs can be claimed under 80C for income tax purpose.
NSC’s provide assured returns. Currently the interest rates are 8.5% p.a. for 5 years NSC and 8.8% p.a. for 10 year NSC
Liquidity and premature withdrawal
From liquidity point of view, these can be pledged with banks for loan purpose. Premature withdrawal is not permitted.
Taxability
Investment in NSC up to Rs. 1 lakh is exempted from income tax under section 80C.
The interest income on NSC is assumed to be re-invested. From taxability point of view, this needs to be added under “Other income” and the same can be claimed as exemption under section 80C. In case, any individual has already exhausted Rs. 1 lakh exemption under 80C, it becomes taxable income.
Any interest amount not taxed (accrual basis) every year becomes taxable at maturity. Means the interest income at maturity is NOT tax free.
Maturity
There is no TDS deducted by post office on interest income. It should be declared by individual as taxable income either every year or during maturity.
If NSC’s are not withdrawn, it would be eligible for interest at prevailing post office savings scheme (which is currently 4% p.a.) for a maximum period of 2 years.
You can transfer NSC from one post office to another post office before maturity by submitting an application form.
Creating regular income from NSC’s for retirement
No wonder this investment option can be used for even retirement planning or to get regular fixed amounts.
Invest in NSC (NSC-IX-10 years) every year for 10 years. After 10 years, you would get regular assured amounts for subsequent 10 years. Since the capital and returns are protected and backed up by Govt. of India, this can be used as a best retirement planning option.
| Year of investment | Amt invested (Rs) | Maturity date | Maturity (Rs) | |||||
| 2013 | 1,00,000 | 2023 | 2,34,350 | |||||
| 2014 | 1,00,000 | 2024 | 2,34,350 | |||||
| 2015 | 1,00,000 | 2025 | 2,34,350 | |||||
| 2016 | 1,00,000 | 2026 | 2,34,350 | |||||
| 2017 | 1,00,000 | 2027 | 2,34,350 | |||||
| 2018 | 1,00,000 | 2028 | 2,34,350 | |||||
| 2019 | 1,00,000 | 2029 | 2,34,350 | |||||
| 2020 | 1,00,000 | 2030 | 2,34,350 | |||||
| 2021 | 1,00,000 | 2031 | 2,34,350 | |||||
| 2022 | 1,00,000 | 2032 | 2,34,350 | |||||
For further information contact Prajna Capital on 94 8300 8300 by leaving a missed call
Leave a missed Call on 94 8300 8300
Leave your comment with mail ID and we will answer them
OR
You can write back to us at
PrajnaCapital [at] Gmail [dot] Com
---------------------------------------------
Invest Mutual Funds Online
Download Mutual Fund Application Forms from all AMCs
Download Mutual Any Fund Application Forms
---------------------------------------------
Best Performing Mutual Funds
- Largecap Funds Invest Online
- DSP BlackRock Top 100 Fund
- ICICI Prudential Focused Blue Chip Fund
- Franklin India Bluechip
- ICICI Prudential Top 100 Fund
B. Large and Midcap Funds Invest Online
- ICICI Prudential Dynamic Plan
- HDFC Top 200 Fund
- UTI Dividend Yield Fund
- Birla Sun Life Front Line Equity Fund
- Franklin India Prima
C. Mid and SmallCap Funds Invest Online
- Reliance Equity Opportunities Fund
- DSP BlackRock Small & Midcap Fund
- Sundaram Select Midcap
- IDFC Premier Equity Fund
- Birla Sun Life Dividend Yield Plus
- SBI Emerging Businesses Fund
- HDFC Mid-Cap Opportunities Fund
- ICICI Prudential Discovery Fund
D. Small and MicroCap Funds Invest Online
- DSP BlackRock MicroCap Fund
2. Franklin India Smaller Companies
E. Sector Funds Invest Online
- Reliance Banking Fund
- Reliance Banking Fund
- ICICI Prudential Banking and Financial Services Fund
F. Tax Saver Mutual Funds Invest Online
1. ICICI Prudential Tax Plan
2. HDFC Taxsaver
- DSP BlackRock Tax Saver Fund
- Reliance Tax Saver (ELSS) Fund
G. Gold Mutual Funds Invest Online
- Relaince Gold Savings Fund
- ICICI Prudential Regular Gold Savings Fund
- HDFC Gold Fund
- Birla Sun Life Gold
H. International funds Invest Online
1. Birla Sun Life International Equity Plan A
2. DSP BlackRock US Flexible Equity
3. FT India Feeder Franklin US Opportunities
4. ICICI Prudential US Bluechip Equity
5. Motilal Oswal MOSt Shares NASDAQ-100 ETF
Posts
![[ Registered ]](http://www.diarist.net/registry/button.gif){kind=small}
No comments:
Post a Comment