NSC Interest Calculator Excel | National Savings Certificate

There are multiple questions regarding NSC (National Savings Certificate) that includes NSC Calculator Excel availability, latest interest rate on NSC and how to calculate interest on NSC which can be easily done using NSC Calculator excel provided!

NSC or National Savings Certificate has gained popularity in recent years due to it’s fixed returns and helping in Income Tax Savings. You can save up to Rs. 1.5 Lakhs and claim this same amount as deduction under Section 80C to save Income Tax. Latest NSC interest rate is 7.7% for the quarter between January to March 2024.

Please fill below form to download NSC Interest Calculator in Excel:

Table of Contents

NSC Interest Calculator Excel Video
NSC Features
Benefits of NSC
Types of NSC
NSC Income Tax Saving Options
NSC Interest Calculation Example
Conclusion
Frequently Asked Questions

Watch this video to understand NSC Interest calculation.

NSC Interest Calculator Excel Video

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NSC Features

National Savings Certificate (NSC) scheme is a fixed income scheme.
It is one of the popular savings instruments in India.
One can activate this scheme at any Post Office.
NSC scheme is the Government of India initiative. Hence it guarantees returns.

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Benefits of NSC

NSC encourages small and mid-income investors to save.
Additionally, you also get Income tax benefit. NSC investments up to Rs 1.5 lakhs is exempt from tax under Section 80C of the Income Tax Act.
They come with a lock-in period of 5 years.
NSC certificates earn fixed interests. The current rate of interest is 7.7% for January to March 2024 quarter.
Like other fixed-income products PPF and Post Office FDs, NSC is also a secure and low-risk instrument.
The minimum deposit is Rs 100. There is no maximum limit for investment in NSC.
There is no TDS for NSC investments. But the interest earned after 5 years in NSC is taxable based on the tax slab rates of individual
We get yearly compounding in NSC, which means the interest earned every month is added to the balance at the end of the year, thus earning us more interest amount.

ALSO READ: Rs. 10000 FD Interest Calculation

Types of NSC

The two types of NSC certificates are NSC VIII Issue and NSC IX Issue.

NSC VIII Issue – The VIII Issue comes with a maturity period of 5 years. The interest rate is 7.7% per annum for January to March 2024 quarter.

NSC IX Issue – The IX Issue comes with a maturity period of 10 years. This issue has been discontinued since December 2015.

National Savings Certificates VIII Issue is an excellent scheme. The initial investment and the accrued interest for the first four years enjoy the benefit of Section 80C of Income Tax Act.

NSC Income Tax Saving Options

Investment in NSC is eligible for tax exemption under Section 80C of the Income Tax Act.
Maximum of Rs. 1.5 Lakh can to claimed to save income tax with Old Tax Regime
The interest earned during the tenure is added to the initial investment and the succeeding years as well.
It is qualified for tax exemption as well during these years, but the total interest earned after 5 years is taxable based on tax slab rates.

ALSO READ: Old vs New Tax Regime Which is Better?

NSC Interest Calculation Example

Let us take an example of NSC Interest Calculation. We will use the excel calculator provided at the start of this article.

Example:
Investment Amount: Rs. 10,000
Tenure: 5 Years
Interest Rate: 7.7%

Below is the screenshot from NSC Calculator in Excel after 1 year:

NSC Interest Calculation in Excel after 1 year

As seen above, we get Rs. 706 as interest amount after first year in NSC. This interest is added back to our intital deposit of Rs. 10,000 which earns more interest for us from second year onwards. This is called yearly compounding in NSC.

Let us see how much interest we will get after 5 years in NSC for above example:

NSC Interest Calculation in Excel after 5 years

So we get total of Rs. 14,490 as maturity amount for Rs. 10,000 investment amount in NSC after 5 years. This interest of Rs. 4,490 is taxable based on the tax slab rates in the year of maturity.

By using the NSC calculator, we get the same maturity amount as shown below:

Conclusion

So NSC or National Saving Certificate has gained popularity after the latest interest rate in NSC has been set to 7.7% for January to March 2024 quarter.

You should definitely consider investing in NSC for your goals of 5 years or other mid term goals, at the same time, get the benefits of saving income tax under Section 80C.

Frequently Asked Questions

How is NSC interest calculated?

NSC interest is calculated on monthly basis using the yearly interest rate. For example, if yearly interest rate is 7.7%, then we get monthly interest rate as 7.7% / 12 = 0.6416%. This monthly interest rate is used to calculate monthly interest using the formula:

NSC Monthly Interest = monthly interest rate * balance / 100
                     = 0.6416% * 10000 / 100
                     = Rs.64.17

This interest amount is earned every month and added to balance at the end of year, as seen in above examples.

What is the interest rate of 5 year NSC?

Current interest rate in NSC in 7.7% for January to March 2024 quarter. This interest rate is fixed throughout the tenure of NSC up to maturity period.

Is NSC interest fully taxable?

Yes NSC interest earned is fully taxable based on the tax slab rates after adding the interest to your income. Though, you can also claim the yearly interest earned under section 80C to save tax from some of the interest earned, mentioned below.

Is NSC interest rate fixed for 5 years?

Yes NSC interest rate is fixed for 5 years even though interest rate is updated every quarter. To get the benefit of latest increased interest rate, you need to issue fresh NSC certificates.

How is NSC interest rate decided?

NSC interest rate is reviewed by Government of India every quarter based on some factors like how much amount is already invested by individuals, whether NSC scheme needs to be boosted, etc.

How can I avoid tax on NSC maturity?

You can mention yearly interest earned every year under “Income from other sources”, and the same income (interest earned) can be claimed under Section 80C (Rs. 1.5 lakh). This will help you to show reduced total interest earned at the end of 5 years thus helping you save income tax when you declare these numbers on yearly basis.

What happens to NSC after maturity?

After maturity of NSC, you can encash or get the maturity amount transferred to your savings account. If you fail to do so than you will earn interest as per saving account interest rate for next 2 years post which you will not earn any interest.

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Income Tax Calculator App – FinCalC

For Income Tax Calculation on your mobile device, you can Download my Android App “FinCalC” which I have developed for you to make your income tax calculation easy.

What you can do with this mobile App?

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