ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 26th June. Click Here for more information.
Source-This post on National Savings Certificate (NSC) has been created based on the article “PM Modi Invests In This Post Office Scheme: Check All Major Schemes At Post Offices” published in “The Outlook” on 20 May 2024.
Why in News?
Prime Minister Narendra Modi disclosed his investments in the National Savings Certificate (NSC) scheme.
About National Savings Certificate (NSC)
1. About: The NSC is a fixed-income investment scheme introduced by the Government of India. It is designed to encourage investment and tax savings, especially for low- to mid-income investors.
2. Investment Process: NSCs can be purchased at any post office. They can be bought in an individual’s name, for a minor, or jointly with another adult.
3. Eligibility Criteria: Only individual Indian citizens who are residents of India. There is no age restriction for purchasing NSC. Hindu Undivided Families (HUFs), trusts, and private and public limited companies cannot invest.
4. Features of NSC
i)NSC is a secure, government-backed investment. It offers fixed returns and significant tax benefits, making it a popular choice among conservative investors who prefer low-risk investment options.
ii) Interest Rates: The certificates earn a fixed annual interest, revised quarterly by the government.
iii) Maturity Period: The investment matures after five years.
iv) Investment Limit: There is no maximum limit on the amount that can be invested.
v) Tax Benefits: Investments qualify for tax savings under Section 80C of the Income Tax Act, up to ₹1.5 lakhs annually.
vi) Accessibility: NSCs are easily transferable between post offices and individuals without affecting the interest or maturity.
vii) Collateral: They can be used as collateral for loans in banks and non-banking financial companies (NBFCs). Investors can nominate a family member (including minors) to inherit the certificate in case of their demise.
viii) Premature withdrawal: It is not allowed except under specific conditions such as the death of the investor, court orders, or forfeiture by a pledgee who is a Gazetted Government Officer.
UPSC Syllabus: Schemes and programmes
