National Savings Certificate (NSC) is a fixed income investment among the post office small savings schemes. It is a savings bond that encourages mainly small and mid-income investors. A fixed-income instrument like the Public Provident Fund (PPF) and post office fixed deposits, this scheme too is low-risk and secure. As part of the tax-saving instrument, there are other secure vehicles like the Voluntary Provident Fund (VPF), Employees Provident Fund (EPF), and more that provide safe returns along with tax benefits of up to Rs 1.5 lakh.
An individual contribution towards NSC is allowed under Section 80C of the Income Tax Act to seek a tax deduction of up to Rs 1.5 lakh. The interest rate of 6.8 percent is compounded annually and is credited at the end of the maturity term.
An NSC can be transferred only once during its entire period as per the existing NSC transfer regulations. It is only after the completion of at least one year from the date of issuance that NSC can be transferred from one person to another.
However, the transfer clause is not applicable if the transfer is rendered on behalf of the court to the relative or legitimate successor of the deceased holder or to the existing holder after the death of the joint holder.
The NSC VIII Issue has a maturity period of five years. A subscriber is required to fill Form NC 34 in order to transfer NSC. The form includes specifics like the name of the transferee, name of the transferor, the serial number of the certificate, amount of the certificate, date of issue and holder’s signature. In the case of a minor, the form has to be signed by the holder or guardian.
In order to comply with regulations related to the authorization of NSC, the holder is also required to furnish KYC documents like photograph, address, valid proof of identity and a certified declaration in the specified format. The old certificate is then validated by a designated individual in the post office with the postmaster’s stamp and date seal. A fee of transfer is charged by the post office.