National Savings Certificate
National savings certificate is a special scheme designed to target the Government employees, Businessmen and other employees drawing a fixed monthly salary. National savings certificate can be bought by any individual or by two or more people jointly, or even by an adult of behalf of a minor. National savings certificate can be bought from authorized post offices or the Head post offices by applying for the same in a form prescribed for the purpose. This application can be submitted either in person or through an authorized agent. There is no maximum limited set for the purchase of National savings certificate.
One of the greatest benefits of this scheme is that there is absolutely no tax deduction at source. This certificate can also be submitted as collateral security in banks to avail loans. An investment made on National savings certificate up to an amount of Rs. 1, 00,000/- per annum gets qualified for an Income Tax Rebate under section 80C of the Income Tax Act.
Trust and HUF are not permitted to invest in National savings certificate. National savings certificate is an assured return scheme.
National savings certificate or NSC can be purchased from all head post offices and other post offices that are authorized to issue National savings certificate. National savings certificate can be bought for a specific value and the interest gets compounded and is returned along with the principal amount at the time of maturity. The payment for National savings certificate can either be made in cash or through a locally executed cheque, an order or with the help of a demand draft drawn in favor of the post master etc.
On maturity the National savings certificate can either be en-cashed at the Head post office or the post offices authorized for the same. In order to cash the certificate, the certificate holder has to approach the Head post office or the authorized post office with the proper proof of identity. After proper verification of the same, if the identity of the certificate holder is proper and authentic, then cash payment is made to the certificate holder.