{"id":10340,"date":"2022-09-26T14:51:37","date_gmt":"2022-09-26T09:21:37","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=10340"},"modified":"2023-05-03T18:23:25","modified_gmt":"2023-05-03T12:53:25","slug":"is-nsc-interest-taxable","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/","title":{"rendered":"Is NSC Interest Taxable?"},"content":{"rendered":"\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/nsc-interest-rate\/\" data-type=\"post\" data-id=\"9578\">National Savings Certificate (NSC)<\/a> is a popular fixed-income investment scheme backed by the Indian Government. It is specifically for small to mid-income investors to encourage them to <a href=\"https:\/\/www.tickertape.in\/blog\/why-should-you-prioritise-investing\/\">invest<\/a> while saving on taxes. This is most commonly preferred by investors looking for a short-term, low-risk investment. In this article, learn about the scheme\u2019s <a href=\"https:\/\/www.tickertape.in\/blog\/flat-interest-rate-vs-reducing-balance-interest-rate\/\">interest rate<\/a>, maturity date and whether NSC interest is taxable.\u00a0<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#NSC-interest-rate\" title=\"NSC interest rate\">NSC interest rate<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#What-is-the-interest-in-premature-withdrawal\" title=\"What is the interest in premature withdrawal?&nbsp;\">What is the interest in premature withdrawal?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#Is-NSC-interest-taxable\" title=\"Is NSC interest taxable?&nbsp;\">Is NSC interest taxable?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#Is-NSC-tax-free\" title=\"Is NSC tax-free?\">Is NSC tax-free?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#Are-NSC-withdrawals-taxable\" title=\"Are NSC withdrawals taxable?&nbsp;\">Are NSC withdrawals taxable?&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#Frequently-asked-questions\" title=\"Frequently asked questions&nbsp;\">Frequently asked questions&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#1-Is-the-interest-rate-on-NSC-fixed\" title=\"1. Is the interest rate on NSC fixed?\">1. Is the interest rate on NSC fixed?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#2-Where-can-I-register-for-NSC\" title=\"2. Where can I register for NSC?\u00a0\u00a0\">2. Where can I register for NSC?\u00a0\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#3-What-is-the-lock-in-period-for-NSC\" title=\"3. What is the lock-in period for NSC?\u00a0\">3. What is the lock-in period for NSC?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#4-What-is-the-minimum-investment-required-in-NSC\" title=\"4. What is the minimum investment required in NSC?\">4. What is the minimum investment required in NSC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#5-What-is-the-maximum-investment-that-can-be-made-in-NSC\" title=\"5. What is the maximum investment that can be made in NSC?\">5. What is the maximum investment that can be made in NSC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.tickertape.in\/blog\/is-nsc-interest-taxable\/#6-What-are-NSC-tax-benefits\" title=\"6. What are NSC tax benefits?\">6. What are NSC tax benefits?<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NSC-interest-rate\"><\/span>NSC interest rate<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is decided by the government every quarter. The NSC interest rate for January &#8211; March 2023 is 7% p.a., compounded annually. Here\u2019s the NSC 5 yrs interest rate chart:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Period<\/strong><\/td><td><strong>Interest rate p.a. (in %)<\/strong><\/td><\/tr><tr><td><strong>October 2022 to December 2022<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>July 2022 to September 2022<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>April 2022 to June 2022<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>January 2022 to March 2022<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>October 2021 to December 2021<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>July 2021 to September 2021<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>April 2021 to June 2021<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>January 2021 to March 2021<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>October 2020 to December 2020<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>July 2020 to September 2020<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>April 2020 to June 2020<\/strong><\/td><td>6.80<\/td><\/tr><tr><td><strong>January 2020 to March 2020<\/strong><\/td><td>7.90<\/td><\/tr><tr><td><strong>October 2019 to December 2019<\/strong><\/td><td>7.90<\/td><\/tr><tr><td><strong>July 2019 to September 2019<\/strong><\/td><td>7.90<\/td><\/tr><tr><td><strong>April 2019 to June 2019<\/strong><\/td><td>8.00<\/td><\/tr><tr><td><strong>January 2019 to March 2019<\/strong><\/td><td>8.00<\/td><\/tr><tr><td><strong>October 2018 to December 2018<\/strong><\/td><td>8.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-is-the-interest-in-premature-withdrawal\"><\/span><strong>What is the interest in premature withdrawal?&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The maturity date of the scheme is 5 yrs from the date of deposit. Before the maturity period, the investment cannot be liquidated\/withdrawn. However, under certain circumstances, the certificate holder is allowed to make a premature withdrawal. The circumstances include<\/p>\n\n\n\n<ul><li>The death of the certificate holder.<\/li><li>If the certificate gets forfeited.&nbsp;<\/li><li>if the court passes an order to withdraw the investment.&nbsp;<\/li><\/ul>\n\n\n\n<p>The interest offered on NSC on premature withdrawal is:<\/p>\n\n\n\n<ul><li>If the investment is withdrawn before 1 yr of the deposit date, no interest is provided.<\/li><li>If the investment is withdrawn after 1 yr of the deposit date, the interest is provided as per the prevailing rate.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is-NSC-interest-taxable\"><\/span><strong>Is NSC interest taxable?<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The annual interest accumulated on the National Savings Certificate is added to the original investment. The accrued interest is eligible for a tax rebate under Section 80C of the <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-income-tax\/\">Income Tax<\/a> Act.&nbsp;<\/p>\n\n\n\n<p>It is to be noted that, as the maturity period of 5yrs, the interest is reinvested only for the first 4 yrs of the investment period. In the 5th yr, the interest earned is given to the investor. So the tax rebate is provided on the interest accrued in the first 4 yrs of the investment.&nbsp;<\/p>\n\n\n\n<p>The maximum interest amount for tax benefits under Section 80C is Rs. 1,50,000. If the interest exceeds the limit, the certificate holder will not be eligible for the tax benefit.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is-NSC-tax-free\"><\/span><strong>Is NSC tax-free?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The investment made in the NSC scheme is eligible for <a href=\"https:\/\/www.tickertape.in\/blog\/income-tax-deduction\/\" data-type=\"post\" data-id=\"6844\">tax deduction under Section 80C of the IT Act<\/a>. But the maximum investment is allowed for a tax deduction of Rs. 1,50,000. If the investment is more than the prescribed limit, the investment is taxable.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Are-NSC-withdrawals-taxable\"><\/span><strong>Are NSC withdrawals taxable?&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>On maturity, the NSC investment amount and interest accrued can be withdrawn. As mentioned above, the interest accrued in the 5th yr will be taxed as it can\u2019t be reinvested. Also, Tax Deducted at Source (<a href=\"https:\/\/www.tickertape.in\/blog\/what-is-tds-and-how-to-file-it\/\">TDS<\/a>) doesn\u2019t apply to NSC. The investors need to pay tax as per their income tax slab.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Frequently-asked-questions\"><\/span><strong>Frequently asked questions&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n<div id=\"rank-math-faq\" class=\"rank-math-block\">\n<div class=\"rank-math-list \">\n<div id=\"faq-question-1663834816349\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"1-Is-the-interest-rate-on-NSC-fixed\"><\/span>1. <strong>Is the interest rate on NSC fixed?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>Yes. The Indian government fixes the interest rate on NSC. It is revised every quarter.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663834827647\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"2-Where-can-I-register-for-NSC\"><\/span>2. <strong>Where can I register for NSC?\u00a0\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>You can invest in NSC by visiting the nearby post office. Fill out the NSC application form, submit the required documents and make your first investment.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663834834047\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"3-What-is-the-lock-in-period-for-NSC\"><\/span>3. <strong>What is the lock-in period for NSC?\u00a0<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The lock-in period for the National Savings Certificate is 5 yrs. An investor must stay invested till the maturity date. However, under special circumstances, the certificate holder is allowed for premature withdrawal.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663834852748\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"4-What-is-the-minimum-investment-required-in-NSC\"><\/span>4. <strong>What is the minimum investment required in NSC?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The minimum investment required to buy a National Savings Certificate is Rs. 1,000. The investment must be in multiples of 100.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663834864329\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"5-What-is-the-maximum-investment-that-can-be-made-in-NSC\"><\/span>5. <strong>What is the maximum investment that can be made in NSC?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>There is no maximum investment cap in the NSC. However, the certificate holders can avail NSC tax benefits only if the investment amount is below Rs. 1,50,000 as per Section 80C of the IT Act.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<div id=\"faq-question-1663834874979\" class=\"rank-math-list-item\">\n<h3 class=\"rank-math-question \"><span class=\"ez-toc-section\" id=\"6-What-are-NSC-tax-benefits\"><\/span>6. <strong>What are NSC tax benefits?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"rank-math-answer \">\n\n<p>The interest rate accumulated in the first 4 yrs of investment on the NSC scheme is eligible for a tax rebate. The investment made on NSC is also allowed for tax deduction under Section 80C of the IT Act.\u00a0<\/p>\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>National Savings Certificate (NSC) is a popular fixed-income investment scheme backed by the Indian Government. It is specifically for small to mid-income investors to encourage them to invest while saving on taxes. <\/p>\n","protected":false},"author":136,"featured_media":10376,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no","footnotes":""},"categories":[1739],"tags":[],"acf":[],"modified_by":"Anjali Chourasiya","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2022\/09\/22-Sep-22-Is-NSC-National-Savings-Certificate-01-01.png?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/10340"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/136"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=10340"}],"version-history":[{"count":4,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/10340\/revisions"}],"predecessor-version":[{"id":11858,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/10340\/revisions\/11858"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/10376"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=10340"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=10340"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=10340"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}