NSC: Many people in the country like to invest in post office schemes for safe investment. One of these schemes is National Savings Certificate (NSC). This scheme is still very popular among the middle class and working people, let’s know…
NSC, National Savings Certificate: Many people in the country like to invest in post office schemes for safe investment. One of these schemes is National Savings Certificate (NSC). This scheme is still very popular among the middle class and working people. NSC is a government scheme that gives guaranteed returns. This scheme is very popular among moderate or conservative investors. An account can be opened with a minimum of Rs 1000 in this 5-year government scheme. There is no maximum deposit limit in this scheme. Tax benefits can also be availed under section 80C in this scheme.
How much interest is being received in National Savings Certificate Scheme?
According to India Post, this scheme is getting an annual compounding interest of 7.7%. In this scheme, interest is compounded annually and is payable on maturity. This is a 5-year scheme and cannot be renewed. To continue investing in this scheme after maturity, you will have to buy a new NSC certificate with the applicable interest rate.
Know how much value of certificates are available
Certificates of 100, 500, 1000, 5000, 10,000 or more are available in the National Savings Certificate Scheme.
How much will be the profit in 5 years on an investment of Rs 15 lakh?
– One time deposit: Rs 15 lakh
– Interest rate: 7.7% compounded annually
– Tenure: 5 years
– Amount on maturity: Rs 21,73,551
= Interest benefit: Rs 6,73,551
Tax exemption under Income Tax Act 80C
Investing in National Saving Certificates provides tax exemption under Section 80C of the Income Tax Act. However, this exemption is available only on investments up to Rs 1.5 lakh.
It is necessary to show in ITR
The principal amount you have invested in NSC is added with the interest after 5 years. While filing tax returns, you have to keep in mind that every year accrued interest has to be shown as income in ITR. As per the CBDT rules, it is necessary to show the interest income of NSC every year in ITR.
This can be understood by an example that if you have invested Rs 1 lakh in NSC and you are getting interest at the rate of 7.7%, then it will be necessary to show the income of Rs 7700 every year in ITR.
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