Deadline for income tax filing is due in few months and everyone, especially the new taxpayers are looking for the ways to lower their taxable income. Deductions that can be made with investments or savings are prescribed in various sections under Section 80 of Income Tax Act. Among all qualified tax saving ways, the National Savings Certificate is the one which offers easy deductions on income tax filing.
National Savings Certificate or mostly referred as NSC is one of the investment schemes offered by the Government of India. Under section 80C of Income Tax Act, purchasing of NSCs up to INR 1,50,000 can avail a tax break for the ongoing financial year during income tax filing. There is no maximum limit set to purchase this certificate, but investments are limited to INR 1.5 lakhs per person. It also comes with a fixed interest of 8.1% per annum, which ultimately get added back to the principal amount annually. These certificates can also be used as a guarantee while taking any bank loans.
There is only one type of NSCs are open to subscribe now, which is NSC VIII and it can be transferred between two persons. These certificates can be purchased from the post offices and are totally market-risk free, unlike mutual fund or ELSS investments.Regarding tax benefits during income tax filing, the investor will get a discount on the initial amount for the first year and from second year, the benefit will be added to the interest earned. This is due to the nature of the NSCs which compound interest annually. It comes with a 5 years of in-lock period and the investor get the whole amount included interest earned by the end of the lock-in period. One can claim the tax benefit during income tax filing through online and offline method.
Also Read : An Overview Of GST Effect On The Indian E-Commerce Industry
National Savings Certificate or mostly referred as NSC is one of the investment schemes offered by the Government of India. Under section 80C of Income Tax Act, purchasing of NSCs up to INR 1,50,000 can avail a tax break for the ongoing financial year during income tax filing. There is no maximum limit set to purchase this certificate, but investments are limited to INR 1.5 lakhs per person. It also comes with a fixed interest of 8.1% per annum, which ultimately get added back to the principal amount annually. These certificates can also be used as a guarantee while taking any bank loans.
Also Read : An Overview Of GST Effect On The Indian E-Commerce Industry
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