Tax Saving Plans: When the fiscal year 2022-23 comes to an end in a few days, investors who want to save money on taxes can do so until March 31. Consider investing in the post office’s National Savings Certificate (NSC) program if you want to save money on taxes while also getting better returns on your money. The scheme currently offers an annual interest rate of 7%. What you need to know about the NSC scheme is as follows:
Benefit of tax exemption: Under Section 80C of the Income Tax Act, investments in NSC are eligible for tax exemption. To take advantage of tax advantages, you can invest no more than Rs 1.5 lakh per fiscal year in NSC.
Opening a child’s account: Children’s names can also be used to open NSC accounts. The account can be opened in the child’s name on behalf of the parents if the child is under the age of 10. The child can manage the account on their own at the age of ten, but as an adult, the child will take full control of the account.
Additionally, anyone over the age of 18 can invest in NSC on behalf of themselves or a minor. The account can also be opened in the names of three adults as a joint account.
Period of lock-in: You are unable to withdraw your investment from NSC prior to the expiration of the lock-in period, which is five years. Currently, the annual interest rate is 7%, and according to the Rule of 72, it will take 10 years and 2 months for your investment to double.
Things to think about before investing: The interest earned during the maturity period cannot be withdrawn by investors in this scheme. Additionally, due to the five-year lock-in period, you cannot withdraw your funds prior to 60 months. As a result, investors looking to invest for one to two years should steer clear of the NSC plan.
