The National Savings Certificate (NSC) is a tax-saving investment among the post office small savings schemes. As part of a tax-saving investment, investors park their capital towards NSCs. An individual contributed towards National Savings Certificates is allowed under Section 80C of the Income Tax Act to seek a tax deduction of up to Rs 1.5 lakh. When it comes to tax-saving instruments apart from NSC there are also some secure vehicles such as Voluntary Provident Fund (VPF), Public Provident Fund (PPF), Employees Provident Fund (EPF), and so on that not only provide secure returns but also provide tax deduction up to Rs 1.5 lakh under section 80C. At a present interest rate of 6.8% which is compounded annually and payable at the end of the maturity term one can invest in NSCs. A National Savings Certificate can be transferred only once during its entire period, as per the existing NSC transfer regulations. The NSC VIII Issue has a five-year period of maturity.
NSCs Transfer Rules
- Only after completion of at least one year from the date of issuance NSC can be transferred from one person to another.
- An individual who is looking to transfer NSC is required to fill Form NC 34 completely. Specifics such as the name of the transferee, the name of the transferor, the serial number of the certificate, the amount of the certificate, the date of issue and the holder's signature are required to fill in Form NC 34.
- The holder who is going to transfer is also required to have KYC documents such as a photograph, address, valid proof of identity and a certified declaration in the specified format in order to comply with the regulations relating to the authorization of the NSC.
- In the post office, the old certificate is then validated by the designated individual with the postmaster's stamp and the post office's date seal. In addition, a fee for the transfer of a certificate will be charged by the post office.
Conditions to be met by the holder
Only after a year from the issuance of the certificate a certificate can be transferred. This clause is not applicable if the transfer is rendered on behalf of the court to the relative, legitimate successor of the deceased holder or to the existing holder after the death of the joint holder. A transferee must be eligible to purchase a certificate in order to transfer the certificate successfully. Specifics such as the name of the transferor, the name of the transferee, certificate specifics, serial numbers, amount and date of issue must be specified. In the case of a minor, the form has to be signed by the holder or guardian. For the transfer of savings certificates from one individual to another, the applicant must fill Form NC 34. A fee, if required, may be imposed by the post office for the transfer procedure.
KYC norms and transfer process
In order to conform with the laws relating to the issuance of the NSC, the transferee must have a signed declaration in the specified format. In addition, the transferee must have KYC records such as a photograph, address and proof of identification and file the KYC form. As the old certificate is not discharged the old holder's name is rounded and the current holder's name is recorded on the old certificate. The designated postmaster then approves it. The postmaster's stamp and the post office's date stamp are also placed to make the transfer process complete.
Points to note
- For each set of a certificate, a specific application is needed.
- Only for the total amount of the certificate, the transfer can be done.
- The amount can't be partially transferred in the NSC transfer process.
- If the transfer has been rendered to a relative, legitimate successor of a deceased purchaser, existing holders on the death of joint holders and on-court directives NSC can be transferred several times during the maturity period.
- Before proceeding with an NSC transfer, the transferee must be eligible to purchase the certificate.