What Is The Full Form Of NSC In Income Tax?
NSC full form in income tax is National Savings Certificate. This is a savings program that anyone can join at any post office in India. This product is designed to promote systematic and disciplined saving for residents living in India. It offers a steady interest of 7.7% per year. It pays the added interest every year from the savings but puts it back, then only liquidates it during the maturity of the certificate.
Investment and Maturity Details:
The NSC has a fixed term of five years, and you can start investing with as little as INR 1000. Additional investment is allowed in multiples of INR 100, and there is no upper ceiling for investment, thereby giving flexibility to the investor. These certificates can be held for one person or a minor and can be pledged as security to get loans from banks.
Tax Benefits and Rules:
You can get a tax break on your NSC investments under Section 80C of the Income Tax Act, up to INR 1,50,000 every year. The interest earned each year on the NSC is considered reinvestment, which is qualified for a tax break except for the interest of the last year, which is taxed as per the tax bracket of the investor.
Rules for Early Withdrawal:
Taking out money from NSC before it matures is usually not allowed, except in certain situations like the death of the owner or if a court orders it. The terms for early withdrawal are very strict, and in case you were allowed to take money out, interest could be foregone, given that the money stayed in the account for some time before the withdrawal.