NSC Calculator

NSC is a fixed-income savings scheme offered by India Post (Government of India). It has a fixed 5-year tenure, currently earns 7.7% p.a. compounded annually, and qualifies for Section 80C tax deduction. NSC is backed by the Government of India, making it one of the safest investment options available.

The current NSC interest rate is 7.7% per annum (as of Q1 FY 2024-25), compounded annually. The rate is set quarterly by the Ministry of Finance. Once purchased, the rate is locked for the entire 5-year tenure — you benefit from rate certainty even if rates fall later.

NSC has a fixed 5-year lock-in period. Premature encashment is not allowed except: (1) On death of the account holder, (2) On forfeiture by pledgee (court order), or (3) Order by a court of law. This makes NSC strictly a 5-year commitment.

NSC interest is taxable but has a unique treatment: Years 1–4: Interest is considered reinvested. It qualifies again for Section 80C deduction (up to ₹1.5 lakh limit) and is not actually received. Year 5: The final year's interest is taxable as income in the year of maturity, as it is actually received. This effectively defers most of the tax burden to maturity.

NSC: 5-year tenure, 7.7% rate, 80C benefit, interest taxable in hands. PPF: 15-year tenure, 7.1% rate, 80C benefit, interest fully tax-free (EEE). NSC has a higher rate but taxable interest; PPF has a lower nominal rate but is fully tax-free (making effective post-tax return better for higher tax brackets). NSC is better if you need 5-year horizon; PPF for 15+ years.

Yes. NSC can now be purchased online through the India Post Payments Bank (IPPB) app or Internet Banking. You can also purchase at any Post Office branch. NSC is issued in demat form (e-NSC) since 2023, eliminating paper certificates.

No. NSC interest is not subject to TDS (Tax Deducted at Source). However, you must declare the taxable interest (Year 5) in your Income Tax Return. The interest for Years 1-4 is shown as income from 80C reinvestment, effectively creating a self-cancelling tax entry in most cases.

No. NSC does not auto-renew. At maturity (after 5 years), the amount is credited to your linked Post Office Savings Account. You need to actively reinvest if you want to continue. If not encashed, the amount continues to earn savings account rate (not NSC rate).