National Savings Scheme (NSS) offers an assured return and tax rebates under Section 88 of the Income Tax Act, 1961. The rate of interest is 9 per cent per annum, compounded annually.
NSS has a duration of four years as compared to NSC, which has a duration of six years. You can extend the duration of your NSS units thereafter if you so desire.
NSS does not offer the benefits of liquidity. There is no premature withdrawal facility except in case of the death of the holder. However, the interest accrued on NSS can be withdrawn at any point. The deposit (principal) can be withdrawn only on maturity of the instrument at the end of four years and the account can be closed at the discretion of the investor.
|NSS has a duration of four years as compared to NSC, which has a duration of six years. You can extend the duration of your NSS units thereafter if you so desire.|
|National Savings Scheme units are issued in various denominations with the minimum investment being Rs 100. There is no prescribed upper limit on investment. However, the scheme offers a coupon of 9 per cent as compared to 9.5 per cent offered by NSC. Moreover, the interest is compounded annually as against semi-annually in NSC.The NSS offers tax incentives as per the provisions of the Income Tax Act, 1961. You can avail of rebates on both the principal invested as well as the interest income under Section 88 of the Income Tax Act. The annual interest income qualifies for exemption under Section 80L, i.e., interest income upto Rs 9,000 is tax-exempt. Moreover, interest income is not subject to TDS.
NSS units are held physically in the form of certificates that are issued to the investors by the post office.