Do you put the money in the NSC schemes to save taxes? Under section 80C of ITA, you have multiple options. The National Savings Certificate, which is also known as NSC, is one of those safe and secure investment options. It was started by the Indian government to motivate the Indian citizens to save. Investors in NSCs are eligible for a tax deduction (maximum value Rs. 1,50,000) under Section 80C of ITA. And the NSC calculator can be used to measure the interest accrued. In this article, we will show you everything you must know about NSC and the National Saving Certificate calculator. Let’s begin.
National Saving Certificate?
The National Savings Certificate offers a stable income. It is a popular form of investment in India. This scheme can be activated at any Postal Service. It is a project of the Indian government. As a result, it ensures safe returns. This certificate of deposit encouraged people with low and moderate incomes to save. They may also be eligible for a tax break. Section 80C of the Income Tax Act exempts NSC holders a maximum of Rs 1,50,000 from taxation. They have a five-year lock-in time frame. Fixed interest is earned on NSC certificates. NSC, like many other products such as PPF and Postal Service FDs, is a safe investment with minimal risks. You can calculate the return on your investment using an NSC calculator.
How to Buy an NSC Scheme?
An investor is required to go to the local Post Office to purchase a National Saving Certificate scheme. They would require your proof of identity and proof of residence. The following process will assist you in making an investment in NSC:
- Acquire and complete the application form for the NSC scheme. After that, use the ID and address proofs for investor validation.
- After validating the necessary paperwork, you can pay the money you wish to invest by direct cash, check, or demand draft made payable to the Post Office’s postmaster.
- Finally, you must gather one nominee and acquire his/her signature to finish the procedure.
The National Saving Certificate scheme can only be used by an individual Indian resident. NRIs, HUFs, and trusts are not permitted to participate in this savings plan.
NSC Calculator – How to Use It?
The total interest on an NSC scheme is compounded every six months. But the investor will receive the interest only after five years. Each year, the interest you earn from the investment is invested back into the total amount. For instance, let us imagine an investor, Mr Vinod. He wants to invest Rs. 5 lakhs inside an NSC scheme. We can measure the maturity amount and accumulated interest by him utilizing an NSC Interest calculator. We can evaluate Mr Vinod’s total amount after the maturity period by following a few simple steps.
- Find an online NSC Investment calculator.
- Fill in the original amount you want to invest. It is Rs. 5 lakhs in this case.
- The tenure of the investment is currently set at five years. The reason? Well, the NSC reaches maturity after five years.
- The rate of interest is 6.8% per year. As of April 1st, 2022, this will be the current rate of interest declared by the Finance Ministry, Government of India.
- Once you’re done entering the values, tap the calculate button.
- The maturity amount is determined using the NSC calculator. It also computes the amount invested and the total return. The maturity value, in this case, is nearly Rs. 6.985 lakhs. The initial investment is Rs. 5 lakhs. The sum of interest generated is Rs. 1.985 lakhs.
Here, we can see that Mr Vinod invested Rs. 5 lakhs in the NSC scheme and got a total of Rs. 1.985 lakhs after the maturity period of the NSC certificate ends, which is five years. However, the total interest you earn from the scheme is taxable depending on the total annual income of Mr Vinod.
What are the Benefits of an NSC Calculator
Determining the maturity amount and the total interest earned with an NSC scheme can sometimes be time-consuming and monotonous. The amount of interest you earn is compounded every six months. The interest is reinvested in the invested capital. The investor receives the interest amount along with the principal amount only at the end of the five-year period.
It is only natural for an individual to desire to know more about the growth of his investment. The online NSC calculator can assist you in estimating the total return on your investment with a few clicks. Let’s take a look at the significant benefits of using an NSC Interest calculator:
- Simple and Easy: Using the NSC calculator is quite a simple process. All you need to do is simply input the number of funds he/she wants to invest. When the investor presses the calculated option, the final maturity amount is determined almost immediately.
- It Saves Time: Using an NSC Calculator, investors can save a lot of their precious time. Investors do not have to undergo the inconvenience of manually calculating the return on investment. They carry out complex calculations in a matter of seconds.
- Precision: This online calculator is developed with pinpoint accuracy. The computations are always correct.
- Planning Your Future Become Easy: Investors can now accurately devise their monetary future. The NSC calculator 2022 calculates the actual amount that the money invested will yield when the investment matures.
- It Doesn’t Cost a Dime: You can utilize the calculator as many times as you want. It won’t even cost you a penny.
Now, you should have a general idea of what the NSC investment scheme is and how the NSC calculator helps you calculate the correct estimates even before you make the investment. If you’re looking for an NSC calculator, you don’t have to worry. Just perform a Google search, and you will have access to multiple NSC calculators to start calculating the details of your future investments. Use the methods mentioned above in this article to use the National Saving Certificate calculator with ease.