Most of the employed people keep in mind that where to invest will save tax along with better returns. National Savings Certificate (NSC) is one such scheme where you not only save tax but also get great returns. According to experts, National Savings Certificate can also be used as a regular source of income.
How much interest do you get?
At present, 6.8 percent interest is available on National Savings Certificate. If someone invests Rs 1000 then for 5 years he will get Rs 1389. Similarly, investment of 10 lakhs will become Rs 13.89 lakhs in five years. There is no upper limit to invest in National Savings Certificate.
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How to save tax?
Under the Income Tax Act 80C, tax savings of up to Rs 1.5 lakh can be claimed by investing in a National Savings Certificate for every financial year. According to experts, it is to be kept in mind that when the policy matures, then the investors will have to pay tax on the money received.
Can you withdraw money before maturity?
Money in National Savings Certificate can be withdrawn only under three circumstances. Death of the investor, on the orders of the Court and forfeiture by the pledgee. If the money is withdrawn within a year, then only the face value will be available. Simple interest will be paid over a time frame ranging from 1 year to three years.