Not many individuals know that these NSC Certificates can also be transferred from one person to another. In order to do so, you need the written consent of the Postmaster or the Head Postmaster.
The transfer can be made after the expiry of a period of at least one year from the date of Certificate.
An authorised Postmaster as referred in sub-rule (1) shall give his consent to the transfer of a certificate only if the following conditions are satisfied, namely:-
(a) the transferee is eligible under these rules to purchase certificates;
(b) the transfer is made after the expiry of a period of at least one year from the date of the certificate or where the transfer is sought before the expiry of such period, the transfer falls under any of the following categories, namely:-
(i) transfer to a near relative out of natural love and affection;
It's important to note that transfer is permitted only for the whole amount and not for the part of it.
Transfer of the Certificate purchased on behalf of minor shall be permitted only if his guardian certifies that the minor is alive and the transfer is for the benefit of minor.
The Certificate may be re-transferred to the investor on the written authority of the pledgee, with the previous sanction of the authorized Postmaster.
To avail tax benefit it is important to declare the accrued interest on NSC on a yearly basis in your tax return. Interest earned on the NSC is taxable but no TDS. Investments in certificate is compounded semi-annually.