Provided that such premature closure shall be allowed only after the account

Provided that such premature closure shall be allowed

This preview shows page 10 - 13 out of 13 pages.

Provided that such premature closure shall be allowed only after the account has completed five financial years. 1% interest penalty is applicable for PPF account closure. This means you will be paid 1% less interest on the interest rate applicable from time to time on the deposits held in the account. 20. The benefits of exemption of interest from Income Tax is not available on deposits made in a PPF account after expiry of fifteen years without exercising option in writing for continuance of the account within one year. National Saving Certificate
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RATE Issue VII - 8.0% p.a. compounded annually MATURITY Issue VIII- 5 Years PREMATURE WITHDRAWAL They can only be withdrawn before the maturity date if: The holder of the NSC passes away. The holder of the certificate has forfeit them through a pledge. A court of law has ordered that the NSC be paid prematurely. TAX BENEFITS Rs 1,50,000 exempt under 80C. Tax on interest income if 80C limit already utilised otherwise gets cancelled out. MIN-MAX LIMIT MIN – Rs 100 MAX – No Limit LOAN FACILITY Available. The certificate needs to be transferred from the holder to the bank. The amount and rate of the loan depends upon the institution. 1. Trust, NRIs and HUF cannot invest. 2. The interest earned every year is not paid back to the subscriber. Instead, it is reinvested. Also, there is no TDS on the interest earned on investments in NSC. 3. The interest that is earned in the last year has to be added to your taxable income. 4. You have to declare the interest earned as income from other sources while computing your tax for year. At the same time, you will also declare that amount as investment in NSC under 80C in NSC, which means the two shall cancel each other out and your interest will be tax free. 5. There are two types of NSC certificates that are available at the post office. While the two types, referred to as Issues, share the same general properties, there are some subtle differences between the two. NSC Issue VIII have an interest rate that is slightly lower than the once offered for Issue IX and have maturity period of 5 years while Issue IX has maturity period of 10 years. NSC Issue IX has been discontinued. 6. There are specific denominations in which these certificates can be taken and these are Rs. 100, Rs 500, Rs. 1,000, Rs. 5,000 and Rs. 10,000 7. Nomination Facility is available. The certificates can also be taken on behalf of a minor. 8. NSC can be transferred from one post office to another and also from one person to another. The person to whom the certificates are being transferred will receive them only after a minimum of 1 year has passed since the date on which the certificates were bought. 9. If the certificates being transferred are held in the name of a minor then the guardian can transfer them only if he or she can prove that the proposed transfer is in the best interest of the child and that the child is alive and well. 10. Closing an NSC prematurely the conditions are:
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(i) If less than a year has passed since the certificate was purchased then only the invested amount will be returned and not interest will be paid.
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  • Spring '14
  • Saving Schemes India

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