Do you invest in reducing your tax burden? Well, the Income Tax Act’s Section 80C offers several possibilities. The National Savings Certificate (NSC) programme is one such possibility. It is a Government of India programme to encourage resident Indians to save. Investors who invest in NSC are eligible for tax deduction under section 80C of up to INR 1.5 lakh. The NSC interest rate calculator can be used to determine the interest earned.
The National Savings Certificate (NSC) programme provides fixed income. It is one of the most frequently used saving options in India. This programme can be activated at any Post Office. The Government of India is behind the NSC scheme. As a result, it ensures returns. This savings scheme promotes saving among those with low and moderate incomes. They can also get a tax benefit. The programme has a five-year lock-in period. It gives a fixed interest of 6.8%.
NSC is a safe and low-risk instrument, just as other fixed-income products like PPF and Post Office FDs. The amount that can be invested in NSC is not capped. There is no TDS on NSC payouts.
A potential investor must go to the closest post office to purchase an NSC plan. They would require their original ID and proof of address. Investing in NSC can be facilitated by taking the following actions:
The interest on your NSC investment is calculated using the following formula.
A = P(1 + r/100)^n
To further grasp the formula, let us look at an example:
Consider investing INR 10 lakhs in a National Savings Certificate scheme with a 5-year term and a 6.8% interest rate. You will earn a total of INR 3,89,493 in interest by the end of five years. Your maturity value will be INR 13,89,493. If done manually, figuring NSC returns or the maturity value can be challenging and time-consuming. We can quickly estimate returns from NSC investments using an online NSC interest rate calculator, which makes the process efficient.
It can be arduous and time-consuming to calculate the interest and NSC maturity amount manually. The principal and the interest accrued are paid to the investor after five years. It makes sense that a shareholder would want to know how much their NSC investment has increased in value. An NSC calculator will assist in quickly calculating the maturity amount. The following are some benefits of using an NSC Interest calculator.
Under Section 80C of the Income Tax Act, investments in NSC up to INR 1.5 lakhs are eligible for tax exemption. The interest earned is added to the initial investment. It is also suitable for tax exemption.
For instance, an investor invested INR 5,000 in NSC. They are eligible for tax exemption on that initial investment in the first year. In the second year, they get tax exemption on their investment as well as the interest earned in the first year.
Tax Deduction at Source (TDS) is not applied to NSC payouts. Investors must pay tax according to their income tax slab rate on the maturity amount.
To expand your portfolio, it is always a good idea to consider various investment alternatives. Thus, your risk is reduced, and your rewards are maximized. You can make investments in safer options like fixed deposits and government bonds. Consider investing in stocks if you have a high-risk tolerance. One of the rapidly growing investing opportunities enabled by technology is P2P lending. The fixed maturity peer-to-peer investment plan from LenDenClub offers annual returns of up to 10–12%* p.a. on your investment.